When buying home, there’s a lot of terminology that you come across during the process. You can always ask your realtor if you’re struggling with real estate vocabulary, but here’s a short article about the differences between a Short Sale’s and Foreclosures:
A short sale is when a homeowner owes more on their mortgage than what the home is actually worth when on the market. In this situation, lenders allow the homeowner sell their house for less than the amount owed— whether or not it is the true, full value of the house. Usually, closings on these houses take 3-4 months, with closing and repair costs being shifted to the lender.
Foreclosures occur when homeowners are incapable of making payments on their home, so the process of the bank repossessing it begins. A foreclosure will move much more quickly than a short sale, and it will be much for financially difficult and damaging on the homeowner. The bank is also able to sell the home in a foreclosure auction, making them riskier houses to buy because they often have never seen the house, and neither inspections occur nor is their and warranty.