Short sales occur when a homeowner sells for less than the mortgage balance and require lender approval, often when the owner faces financial distress. The lender reviews financials and may delay or reject offers, making short sales slower but often involving better property condition and less buyer competition. Foreclosures occur after default when the lender repossesses and sells the property, typically faster and priced lower but sold as-is with higher risk and maintenance needs. Buyers should weigh priorities and choose short sales for condition and negotiation flexibility or foreclosures for speed and lower price.
You're scrolling house listings in Seattle or higher priced properties in Los Angeles, when you spot your dream home priced below market value. It seems like a rare opportunity, but there's a catch: is it a short sale or a foreclosure? So, what's the difference? In simple terms: Short sale: The homeowner sells the property for less than they owe, with lender approval. Foreclosure: The bank takes ownership after the homeowner defaults and sells the home directly.
What is a short sale? A happens when a homeowner sells their property for less than the remaining balance on their mortgage, with the lender's approval. This usually occurs when the homeowner is in financial distress (unable to keep up with mortgage payments) but wants to avoid foreclosure. Because the sale involves the lender agreeing to accept less than what is owed, the process can take longer than a typical home sale.
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