What is the difference between a "Short Sale" and a "Foreclosure"?

Dated: October 4 2019

Views: 338

As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the possibility of losing their homes, short sales and foreclosures provide them options for moving on financially. The terms are often used interchangeably, but they’re actually quite different, with varying timelines and financial impact on the homeowner. Here’s a brief overview.

A short sale comes into play when a homeowner needs to sell their home but the home is worth less than the remaining balance that they owe. The lender can allow the homeowner to sell the home for less than the amount owed, freeing the homeowner from the financial predicament.



On the buyer side, short sales typically take three to four months to complete and many of the closing and repair costs are shifted from the seller to the lender.

On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home so the bank begins the process of repossessing it. A foreclosure usually moves much faster than a short sale and is more financially damaging to the homeowner.

After foreclosure the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty.

If I can help you avoid foreclosure, please contact me. Rebecca Yavner, REALTOR with eXp Realty. Making real estate easier for you! 214-785-8188

Blog author image

Rebecca Yavner

My goal is to make the experience of buying or selling real estate the best it possibly can be. I cannot promise that it will go perfect. But I can promise you that I am going to do everything I can t....

Latest Blog Posts

Things to do in Grayson County

Here are a few suggestions of what to do in Grayson County.....Visit Eisenhower State ParkLocated on the shores of Lake Texoma in Denison, Texas, Eisenhower State Park offers visitors a wide range

Read More

What is the Difference Between a Home Warranty and a Home Insurance

When purchasing a new home, it’s important to do in-depth research on all facets of the homebuying process. One thing you’ll need to understand is how to best protect yourself and your

Read More

Tips to Becoming a Morning Person

Want to Achieve Morning Person Status?Ever wish you could become one of those rare morning people? The ones that wake with a start, feeling refreshed and energized. The ones that get in that morning

Read More

The Right Down Payment Strategy for You?

WHICH DOWN PAYMENT STRATEGY IS RIGHT FOR YOU?You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it

Read More