Foreclosure Vs Short Sale - What's the Difference?

 Aug 25th, 2009

Bob Bridge

Foreclosure is something few of us like to think about; after all, no one wants to lose their home, much less suffer the serious damage to their credit rating which comes along with a foreclosure. There are methods which you can use to prevent a foreclosure. One of these ways to avoid foreclosure is a short sale. When your home is foreclosed on, the property reverts to the lender, who then has to maintain it.

In a short sale, you seek out willing buyers for your home, which you'll offer at a reduced cost. During this process, you have to keep in contact with the lender to let them know that you are doing your utmost to sell the home. Even in the event that a foreclosure date has already been set, you have the option of selling your home at any point prior ' and with many homeowners facing foreclosure, this is a good time for real estate investors looking for deals on homes.

If you find a qualified buyer, let your lender know immediately so that the process of selling the home can get underway. You won't be making a profit on a short sale, since all of the proceeds of the sale will go to the lender. You will be able to avoid damage to your credit history by reporting the transaction as a payoff instead of as a foreclosure. If the bank handling the mortgage is the bank you use for your personal or business banking, this can keep your other accounts in good standing.

However, while a short sale will prevent you from having to pay mortgage payments, it's not something you can do overnight. You'll have to do some work in order to get your property sold - many buyers assume that a home in pre-foreclosure will be poorly maintained or even abandoned.

The best way to get your home out of foreclosure and into a short sale is to use a company that knows and has done short sales. Our Law Firm specializes in short sales from start to finish. We can provide you with a real estate agent, closing attorney and complete the entire process for you.

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