These terms are usually used interchangeably, however, there's a huge difference. See for yourself;
A short sale happens when a homeowner needs to sell but the home is worth less than what's owed on it. The lender can allow the homeowner to sell the home for less than the amount owed, therefore 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. Next up➡ 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.
What happens next➡After foreclosure, the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales. Why? because homes often times the homes are bought sight unseen, with no inspection or warranty. We hope this has shed some light on the differences between a short sale and a foreclosure.
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