Selling a home is an emotional experience for most people. It’s especially difficult when you are facing foreclosure or a short sale due to financial hardships. We have been servicing the San Antonio Texas area for a long time and know that it is important to understand the differences between a foreclosure and a short sale. Let’s look at the pros and cons for each of them.
Foreclosure Pros and Cons
Foreclosures occur when you fail to make mortgage payments on your property, which results in the lender reclaiming the property. Going through a foreclosure can have serious consequences, including negatively impacting your credit score by as much as 200 points, making it difficult to qualify for credit cards, loans, and mortgages in the future. However, there are some advantages of going through a foreclosure. One of them is that you will no longer be responsible for your loan—meaning you do not need to pay any remaining balance after the foreclosure is complete. Another advantage is that if you file bankruptcy before or during foreclosure proceedings, it may help protect you from being sued by creditors for any deficiency on unpaid balances (balance left over after selling your home).
Short Sale Pros and Cons
A short sale occurs when you sell your home for less than what remains on the mortgage loan balance. The proceeds from this sale will go towards paying off some or all of what you owe on your mortgage loan—however, they could still come up with a deficiency balance that needs to be paid off. This means that if there are any funds left over after paying off your mortgage loan balance, those funds would be paid directly to creditors instead of going back into your pocket like with a foreclosure process. Short sales also have more stringent requirements than foreclosures because lenders must approve all offers made on these types of sales before they can proceed which can take some time and effort. On top of this, they can also have an impact on your credit score—usually not as drastic as a full-blown foreclosure but still enough to affect future credit applications significantly.
When faced with either a foreclosure or short sale situation it is important to look at all options carefully before making any decisions about how to proceed with selling your home. Foreclosure may seem like an attractive option due its potential benefits such as no remaining balance due after completion but there are also risks associated with it such as potentially large drops in credit score which could affect future borrowing power significantly if not managed properly afterwards. On top of this, short sales also have their own unique set of pros and cons associated with them so understanding these differences between both processes is essential in order to make an informed decision about how best to proceed with selling one’s home under difficult financial circumstances. Ultimately though, either way should always be considered carefully so that one does not regret their decision further down the line!
There is another option in the mix if you would like help avoiding the scenarios we were just discussing regarding foreclosures and short sales. We are Cash Home Buyers and provide our services to home owners all over Texas. If you are in San Antonio and would like to talk through your situation don’t hesitate to reach out to us. We are Houses 4 Texas LLC and the owner has been buying houses and helping people with Real Estate challenges since 2001. We Buy Houses cash, as-is and have the ability to do it really quickly. Check out our website Houses4Texas.com or give us a call and we can provide a quick fair cash offer.