“It’s hard. You are trying to hold on to your home. And it’s getting harder. Your hours may have been cut at work, your spouse may have been laid off and the pressure is starting to mount. The phone calls are coming, so are the letters, from the bank. You have a drawer set aside with all the notices of default and you don’t see any way out. At some point, maybe you are there now, you are considering letting your home go – back to the bank. What do you do? Who do you talk to? Should you allow your home to go to go to back to the bank or should you consider a short sale? I have been a REALTOR in Lubbock for 1 year and during this year of helping people buy and sell homes I have never seen a market like this one. I am seeing good, hard working, people lose their homes and even worse, in most cases – it’s not their fault. They did nothing wrong. One of the questions I am getting from my past clients is “what is the difference between foreclosure and short sale?”
A short sale is when a lender agrees to sell the property in default for LESS than what the borrower owes on the home. Why would they do this? Foreclosures COSTS money!! If there is a reasonable offer it makes more sense for the lender to avoid the time and costs to foreclose. This also saves the borrowers credit from a big "hit".
A foreclosure is the legal process by which a lender obtains a termination of a borrowers equitable right of redemption, either by court order or by operation of law.