Ever wondered what the difference is between foreclosure and a short sale on a home?
Well, we’ve been buying and selling real estate in the Greater Philly Area for quite some time now. We’ve helped many sellers out of sticky situations (foreclosure, job relocation, bad tenants, divorce… you name it). And if you’re interested, we can make you a fair cash offer on YOUR home, too — we can even close in as little as two weeks! Give us a call at (610) 569-9042 to learn more.
During our time as real estate investors, we’ve come to learn the difference between a foreclosure and a short sale on a home.
Here are the differences and similarities…
Similarities — Both foreclosures and short sales are processes for homeowners in financial distress. Unfortunately, both also have a negative impact on the homeowner’s credit score, tax return, and future ability to get a loan.
Differences — A short sale is when the mortgage lender allows the homeowner to sell the home for less than what’s owed on the mortgage and forgives any remaining debt. A foreclosure is when the mortgage lender repossesses the house without the homeowner having a say in the matter. A short sale has a less negative impact on credit score and tax return than a foreclosure, so it’s often in the homeowner’s best interest to go the short sale route rather than foreclose if possible.
The best thing a homeowner can do in this situation is call their lender and ask about their options. If it’s possible to do a short sale rather than foreclose, that’s probably the better way to go.
Hope that clarifies things!