The common question I get from homebuyers is "What is the difference between Short Sales and Foreclosures?"
My answer: "Foreclosures are the better purchase of the two options!"
Now, I have NOT answered the question.
A Short Sale is the process before a property goes into foreclosure. Ideally during this period, the owner is currently delinquent and has the opportunity to negotiate with the bank to sell the home at a lower price than what is owed by the owner on his/her mortgage. Notice I say "Ideally!" This process can take 45 days to 365 days to settle...keep in mind while this short sale might be approved by the bank, the Foreclosure department is still foreclosing on the home. The Short Sale and Foreclosure are two independent departments which DO NOT communicate with each other.
A Foreclosure is after the short sale process and the bank fully owns the property. This process can take 30 to 45 days to settle.
From a Buyer's perspective, the foreclosure transaction is a more straightforward process of purchasing a home. From a Seller's perspective, the short sale is less detrimental to their credit score.
Keep in mind, if you are thinking about selling your home as a Short Sale...you will have to be able to show "financial hardship" to be approved by bank.
Call me at 301-452-4767 if you have any real estate questions.