As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the possibility of losing their homes, short sales and foreclosures provide them options for moving on financially. The terms are often used interchangeably, but they’re actually quite different, with varying timelines and financial impact on the homeowner. Here’s a brief overview.
Short Sale A short sale comes into play when a homeowner needs to sell their home, but the home is worth less than the remaining balance that they owe. The lender can allow the homeowner to sell the home for less than the amount owed, freeing the homeowner from the financial predicament.
On the buyer side, short sales typically take three to four months to complete and many of the closing and repair costs are shifted from the seller to the lender.
Foreclosure On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home, so the bank begins the process of repossessing it. A foreclosure usually moves much faster than a short sale and is more financially damaging to the homeowner.
After foreclosure the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty.
The team at Farnan Real Estate have experience working with Delaware short sales and Delaware foreclosures, and work with experts in the field to ensure smooth transactions. Learn more in the video below as Scott Farnan of Farnan Real Estate, a Patterson-Schwartz real estate agency, sits down with Bill McCormick of CK Capital Management, a leading Delaware short sale and foreclosure expert, to discuss some common questions on the topic.
The Farnan Real Estate team are experts at Delaware real estate and Pennsylvania real estate and are prepared to guide you through the buying/selling process. Contact Farnan Real Estate today to get started.