Short Sale or Foreclosure?

You have probably heard the term “short sale”.  What is it?  A short sale is when someone sells their home for less than what they owe the lender.

Some people think a short sale is the same as a foreclosure.  However, in a foreclosure, the bank takes possession of your home.  The homeowner will have to leave the home quickly.  The bank then sells your home.  Foreclosures hurt the homeowners credit score and, normally, they cannot obtain another home loan for five years.

So if you find yourself in a bad financial situation, it is best to try to do a short sale.  There are several advantages to short sale over a foreclosure.  Short sales do not hurt your credit score as much.  You can sell the home at your pace and stay in the home while you have it on the market.  Also, the seller is not responsible for closing costs or commissions in a short sale.  The bank or lender will cover those costs.

Read the Original Article Here: What Is a Short Sale? The Benefits for Buyers and Sellers