What is the Main Difference Between a Short Sale and Foreclosure?
A short sale is selling a property for less than the debt that’s owed on that property. A foreclosure is where the bank is trying to take the property back via court proceedings. The debt is going to be the same in both situations, and the difference on the same is likely going to be the same in either situation. Credit wise, a short sale is going to look better on your credit report than a foreclosure. Also, a foreclosure will probably keep you from getting a loan or mortgage for a year longer than a short sale would. Although a short sale may look better, in Florida, they have five years to pursue you for the difference on the house if they don’t forgive it at the time of the short sale. In a foreclosure, the time is limited to one year. It’s important to consider all of the options before saying you want a short sale. The benefits of a short sale in the short term may turn into a hassle in the long term.