The following article comes to us from Carla Davis Hill, a Realty Times writer and editor. It is a fairly basic article desribing some of the differences between short sales and foreclosure. I'd consider it a good read as you explor your options.
Of note is her perspective on hiring a knowledgable agent and the use of an attorney. We appreciate her mentioning this as it is a very important part of the "successful short sale" equation.
Below is an except from the article and a link to read the balance:
In today's economic climate, many families are finding themselves in dire straights. The home that was once a blessing has now become a financial burden.
In an attempt to avoid foreclosure, which can reap havoc on one's credit for years to come, homeowners are searching out details on short sales.
In simple terms, a foreclosure is when, after defaulting on payments (typically after 3 months), an estate becomes the absolute property of the lender. And what's more, in some cases you, the homeowner, may also be responsible for "deficiency judgments." These mean if the sale of the foreclosed property doesn't satisfy the amount of the loan, you may be obligated to pay the difference. (FYI, this is not true for Arizona homeowners as we have laws protecting you from deficiency judgements after a foreclosure.)
On the other hand, a short sale, according to MSN Money, is "the sale of a house for less than what the owner still owes on the mortgage. If the lender agrees to a short sale, the rest of the homeowner's debt typically is forgiven. Lenders sometimes agree to the procedure in order to take a small loss and avoid the lengthy and costly foreclosure process."
