What are the differences between a foreclosure and a short sale?

A foreclosure and a short sale are two different types of real estate transactions. In a foreclosure, a homeowner is unable to keep up with their mortgage payments and the lender takes back the property. In a short sale, the homeowner is still unable to keep up with their payments, but they negotiate with the lender to sell the property for less than what is owed on the mortgage. In a foreclosure, the homeowner has no control over the sale of the property and the lender will usually sell the property "as-is" for whatever amount they can get. The foreclosure process can take several months to even several years depending on the jurisdiction. The homeowner will no longer have any ownership rights to the property once the foreclosure is finalized. In a short sale, the homeowner and the lender will negotiate a sale price and the homeowner will remain in control of the sale process. Since the sale price is agreed upon in advance, the short sale process is generally shorter than a foreclosure. Additionally, the homeowner may be eligible for certain tax benefits that may not be available in a foreclosure situation. In both foreclosure and short sale situations, the homeowner will still owe the lender any difference between the amount owed on the mortgage and the amount received from the sale of the property.

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What are the differences between a foreclosure and a short sale?

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