Short sales and foreclosure are two things that can cause confusion to many people whenever their real estate properties are going through difficulties. There are people who are saying that foreclosures are better, while some are saying that short sales are better. Both have their valid reasons as to why they think the other is better than the other, but in order to give you more detailed information, I will be showing you the difference between these two very common real estate terms.
The effect on the credit rating of a person will be negative regardless of the option that he takes. However, if you are going to get into a short sale, the reduction in your rating will be less compared to a mortgage. It will be easier for you to recover from your loss if you are going to get into short sales. If you are going to ask me, none of these is the best, but if you are left with no other choice, then short sales would be better in terms of credit rating.
When it comes to the real estate fees that you have to pay, foreclosures are better because they have fewer fees, and the amount that you have to settle will be lower. The main reason why there are a lot of people who are not getting into this is because there are lenders who are asking for large fees after approving the sale. Keep in mind that you are going to lose your real estate property because you are experiencing financial difficulties, and why would you even dare to pay additional fees?
The reason why there are people who are getting into short sale before foreclosure is because this will help them buy more time to look for the funds that they need. People who are having problems with their finances often need to have more time, and getting into short sale is one of the best options for them. In real estate, owners who have their properties listed have 60 days to gather the funds or sell the property.
Real Estate Agent
The problem with short sales is that you need to have an agent who can help you look for a buyer. Since the agent will get less commission for it, most of them would simply hide it from buyers, and focus on selling normal priced properties. This is also a problem when it comes to short sales, and is the reason why most people are getting into foreclosure. But you can talk to a real estate agent and explain your situation. In most cases, the agent will understand you, and will make an exemption for the rule that they have set themselves.