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Which is better a short sale or foreclosure?
Timing also differs: Short sales can take up to one year to close, while foreclosures generally move along much faster because lenders are intent on recovering the money they’re owed. Furthermore, a short sale is far less damaging to your credit score than foreclosure.
Are short sales more profitable than foreclosures?
Generally, banks lose more money on a short sale than on a foreclosure, but there are still times when a short sale is a better option. Sometimes the process of foreclosure is more expensive and involved than the bank wants to handle.
Why buying a short sale is bad?
Short sales are a mixed bag for the buyer, the seller and the lender. If you’re a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. You’ll also walk away from your home without a penny from the deal, making it difficult for you to find another place to live.
What are the pros and cons of a short sale?
The Pros and Cons of Buying a Short Sale
- Short sales can take a long time.
- They are sold as-is.
- Make sure the lower price is really worth it.
- The good deal factor can be influenced by the market conditions.
- Less competition.
- Don’t overlook needed repairs.
- Home inspections are a must.
Can banks make a profit on a foreclosure?
Will I Get Money Back After a Foreclosure Sale? If a foreclosure sale results in excess proceeds, the lender doesn’t get to keep that money. The lender is entitled to an amount that’s sufficient to pay off the outstanding balance of the loan plus the costs associated with the foreclosure and sale—but no more.
What’s the difference between a short sale and a foreclosure?
For buyers, either can result in a good deal on a home, but short sales can take a long time to close. Foreclosure is a bank process where they try to recover as much of the unpaid mortgage balance from a property as possible. They do this by forcing the sale of the property, usually at an auction.
Why do you want to buy a short sale house?
Some short sale buyers wait months for a response. Buyers gravitate toward short sales for two reasons: the list price is attractive, and they believe the seller is desperate. However, neither of those beliefs is necessarily true. Since not every short sale home is in foreclosure, not every seller is desperate.
Can a bank accept a short sale offer?
Banks may refuse to accept short sale offers only to get title to the home through foreclosure, which they ultimately sell for tens of thousands less. You can get a clue as to what the bank might do by looking at the opening bids posted in the event a home is in foreclosure. Often banks will post a minimum bid for the auction.
Can a short sale affect your credit rating?
While short sales are not detrimental to a homeowner’s credit rating, foreclosures are. A homeowner who has gone through a short sale may, with certain restrictions, be eligible to purchase another home immediately.