Short sales and foreclosures are both options for buying a home. The hope with these types of loans, when compared to more traditional housing, is that you can find a great deal. However, each of these options presents its own set of benefits for a buyer. They are especially known for being generally lower in cost than the average home on the market. Know the skinny on short sale vs foreclosure homes prior to buying. When you're looking for a deal, it's sometimes easy to get excited before you know everything you need to know in order to make a decision. Take advantage of the window, but don't get ahead of yourself.
You can start to understand the two opportunities by looking at the similarities and differences.
Similarities with Short Sale vs Foreclosure
Both have alterations to the current or last mortgage agreement. It's important to know what those alterations are and how they will affect the price and value of the home.
Both will likely sell for a price less than market value. Find out the original price, why the price was lowered, and what the bottom line will be for you.
Both present an opportunity for buyers. These homes are great because of the lower pricing and eagerness of the seller to actually sell.
Differences with Short Sale vs Foreclosure
Short sale is voluntary where foreclosure is forced by the lender. This can make a difference in who handles the sale. Short sales will be handled by the homeowner and real estate agent or broker, whereas foreclosures will be handled by a bank, mortgage company, or other lender.
Short sale homes are still in the possession of the original owner, where foreclosures belong to the bank. Again, this can affect the overall experience, so find out who you will be working with to see if that will be a good fit for you.
Short sales have only a small window of opportunity before the home goes into foreclosure, so it's important to jump at the chance if all looks good.
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