138. Short Sale vs Foreclosure – What’s the Difference in Florida?

Being a buyer or seller in a short sale or foreclosure can be an emotional rollercoaster and a trying journey. While these situations offer exciting possibilities and benefits, they also come with a host of difficulties and complicated processes. As someone on either end of the deal, it’s crucial to take a step back and thoughtfully assess the pros and cons before making a decision. This way, you can ensure that you’re making a choice that will work best for you in the long run.

What Is A Foreclosure In Florida, FL?

The harsh reality of a foreclosed home is when a homeowner’s dreams and memories are ripped away due to their inability to make mortgage payments. The heart-wrenching sight of the bank taking over the property is a constant reminder of the homeowner’s financial struggles. If you’re facing the same hardships with keeping up with your house payments, it’s important to remember that the lender has the power to seize your home and reclaim the loan they granted you. This situation can be an overwhelming and emotional burden for any homeowner to bear.

The devastating truth of a foreclosure is a soul-crushing blow to a borrower who has struggled to keep up with their mortgage payments. The cold and callous lending institution takes ownership and control of the borrower’s cherished home, leaving them no choice but to pack up their belongings and say goodbye. The once beloved property is then mercilessly sold at auction or through real estate agents, snatching away all hope and leaving a deep, hurtful scar on their credit history. The unforgiving consequences of a foreclosure can haunt a borrower for many years to come, making it nearly impossible for them to ever own a home again and crushing their hopes and dreams.

Depending on the state that you live in… a foreclosure can work in different ways. Check out the foreclosure process information over here at the HUD Government website.

What Is A Short Sale?

Despite the gut-wrenching and overwhelming experience of a short sale, the borrower retains a glimmer of hope by still owning their cherished home.

The definition of a short sale is… “short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt” (source: Wikipedia)

A short sale can be a devastating, tear-jerking final option for both borrowers and lenders alike. When a homeowner is unable to make ends meet with their mortgage payments, they may be forced to sell their beloved home for a lesser amount than what they owe on the mortgage. This heartbreaking outcome often results in a remaining balance, referred to as a deficiency, which the borrower may still be burdened with paying. This agonizing decision can take a heavy toll on the feelings of all those involved.

Oh, the terror! This path is a frustrating, anxiety-ridden journey. With multiple lending institutions holding a piece of the mortgage puzzle, it’s like walking through a battlefield. Each and every entity with a vested interest in the property must come to a unified agreement on the terms of the sale. And just when you dare to dream of a hopeful resolution, one lender can bring it all crashing down by denying their consent. It’s enough to drive anyone to the brink of madness.

Short Sale vs Foreclosure – Your Options

Although both choices have their respective drawbacks, a short sale is a much gentler blow to a borrower’s creditworthiness compared to a foreclosure. The latter can completely obliterate a borrower’s credit score with a devastating drop of 300 or more points, while a short sale may only leave a minor 100-point dent.

The road to homeownership is a difficult and arduous journey for borrowers who have suffered the heartbreak of foreclosure. They are often banned from the dream of owning another home with a traditional mortgage for a devastating 5 to 7 years! But hold on, there is a glimmer of hope! In some instances, borrowers who underwent a short sale can start their path to homeownership immediately, bringing new light to their future prospects.

As many Americans struggle with an economy that has yet to completely recover from the 2008 crash, folks are having a hard time making monthly mortgage payments. Choosing between being foreclosed and initiating a short sale (or a 3rd option…  selling your Florida house fast  )is an easy choice for a borrower having troubles paying their mortgage on time.

Sometimes, lenders are desperate to work with borrowers to make a short sale happen, to avoid the costly and drawn-out process of foreclosure.

“We wholeheartedly and passionately endorse this with all of our being!”

  1. Talk with your lender and discuss ways that they can work with you on your loan. We offer this service where we can help guide you in the right direction if you run into issues with your lender… just reach out to us on our Contact page and we’ll discuss your situation.
  2. Desperately try reaching out to your lender to explore every possible option, including a short sale or any other programs they may offer, to help you find relief and forgive a portion of your loan. Create a new and more manageable monthly payment plan, so you can regain stability and get back up on your feet. Don’t give up, there is hope!
  3. If the bank isn’t willing to work with you very much… your best option may be to sell your house. Work with a local real estate house buyer service like 123SoldCash to sell your house fast for an all-cash offer. If you’re interested we can look at your situation and make you a fair offer on your house within 24 hours. Just fill out the form on our website over here >>
  4. Foreclosure. Last resort is to let the house fall into foreclosure. This is the worst possible scenario. It’ll harm your credit and you could still be left with money owed to the bank even after the foreclosure is finished.

By knowing your options, you may be able to dodge a significant impact on your credit score, allowing you to purchase a new home when your situation improves. A foreclosure on your credit report makes that possibility extremely difficult for 5-7 years, so if you have the opportunity, a short sale can be the better option.

Have a pending foreclosure?  We’d like to make you a fair all-cash offer on your house.

Give us a call anytime at (786) 904-1444 or
fill out the form on this website today! >>

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