What is the difference between a short sale and a foreclosure?

A short sale and a foreclosure are two different processes when it comes to real estate litigation law in Texas. A short sale is when a homeowner, who is behind on their payments, negotiates with the lender to sell their home for less than what they owe on the loan. The lender is willing to accept this amount due to the fact that it is more than the homeowner would get in a foreclosure. The homeowner will be able to avoid having a foreclosure on their record and won’t have to worry about owing the difference between what they owe and what the house sells for. A foreclosure occurs when the homeowner has not been able to make payments and the lender has decided to repossess the property. The lender takes back the property and then sells it to cover the outstanding loan amount. The homeowner will be responsible for any difference between what the house sells for and what they still owe on the loan. A foreclosure typically has a more negative impact on a homeowner’s credit and record. Overall, a short sale is a more favorable option for a homeowner in Texas because it can help them avoid a foreclosure while still making it possible for them to pay off their loan. A foreclosure can have a significant negative impact on a homeowner’s credit and record and can make it more difficult to get a loan in the future.

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What is the difference between a short sale and a foreclosure?

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