Which is appropriate for you: Short Sale or Foreclosure?  

Which is appropriate for you: Short Sale or Foreclosure?   

If you are having trouble paying your mortgage, then keeping your home may be unrealistic. In this case you have likely considered two options: short sale or foreclosure. But which one is the most appropriate for your situation? Let’s take a look at each so that you can get a better idea.

Short sale and foreclosure defined

Before you can decide whether a short sale or a foreclosure is best for you, you must know what they are in the first place. Here is the definition of each.

Short sale defined

A short sale is an agreement between you and the bank to sell the house for less than the amount that is owed.

Foreclosure defined

This is when the bank exercises the right to take ownership of a property if the home owner fails to pay their mortgage.

Which one is better for me?

Each option has unique benefits and drawbacks that you should consider before making a decision. These include the following:

Pros and cons of short sales


Short sales have benefits for both the lender and the homeowner. Although the home is being sold for less, a short sale allows the lender to cut their losses preemptively; for homeowners, you can avoid a foreclosure on your credit report.


A short sale is not guaranteed to happen. It has to be negotiated with the bank; even if a short sale is agreed upon, the process can be long and difficult. Most banks won’t consider a short sale until after you have already done significant damage to your own credit by missing payments. Also, you cannot do a short sale if you successfully file for bankruptcy, because short sales are considered collection activities.

Pros and cons of foreclosures


Although foreclosures are often dreaded, they have some benefits for the homeowner. For example, you don’t have to worry about people looking around your house for a sale or worry about negotiating with the lender.


A foreclosure is one of the worst things that can appear on your credit report. In addition, you have zero control over anything during the foreclosure process.

Which option is best for you?



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