The Difference Between a Foreclosure and a Short Sale in Pasco County, Florida
For both the homeowner and the lender, short sales and foreclosures each come with their own pros and cons. If you own a home in Pasco County, Florida, understanding the difference between those pros and cons can go a long way in helping you decide the best way to handle a potential or imminent foreclosure.
What a Foreclosure in Pasco County Looks Like
Simply put, a foreclosure is any property in the county where the homeowner (or borrower) has stopped making mortgage payments (or defaulted on their loan). In these situations, the lender (typically the bank) uses a legal process known as a foreclosure to sell the home to someone else to secure the mortgage that the borrower has stopped paying.
Usually, a foreclosed property will be sold by the bank or a trustee at an auction. In some cases, a real estate agent may be engaged to sell the home through the more traditional method. What’s more, a foreclosure significantly damages the homeowner’s credit in ways that will take years to repair. This means your chances of getting another mortgage are slim to none for the foreseeable future following a foreclosure.
What a Short Sale in Pasco County Looks Like
Unlike a foreclosure, a short sale is one where the home is still owned by the buyer when the sale is made. A short sale means the owner is selling the home for less than the balance of what is owed on the property. It typically involves an agreement between the owner and those who own liens against the property to settle the debt for the amount collected from the sale.
A short sale is an agreement that lenders and borrowers often use to avoid even more undesirable outcomes. Sometimes, the homeowner may still owe the lender the amount not covered by the short sale.
A short sale, despite the name, can sometimes take a while because there may be multiple lending institutions that own part of the mortgage on the property. Whatever decision is made must be agreed to by all who own part of the mortgage on the property. This means even a single lender can derail a short sale.
Which is the Better Option in Pasco County?
The bottom line when deciding between a short sale and a foreclosure for most homeowners in Pasco County and around Florida is that a short sale can help avoid the worst part of foreclosure: the destruction to the borrower’s credit rating for the next 5-7 years. A single foreclosure can crater your credit score by more than 300 points. Compare this to a short sale which still hurts your credit score but by typically only 100 points.
However, there is a third option available to you. Selling your house quickly for cash to a third party before being forced into the choice between a short sale and foreclosure. Even though such a sale is never the goal of owning a home, it can be a far wiser and financially advantageous choice when facing foreclosure.
Easy Sale HQ Can Help You Sell Quickly If That’s Your Best Option
We have built a reputation for helping Pasco County homeowners avoid the long-term consequences of foreclosure. Protecting your credit score and avoiding walking away empty-handed will always be better than facing foreclosure. If you own a house in Pasco County and need to sell it quickly, call our office or just click on the link on this page to get started. We normally can determine how much we could offer in 2 days and be ready to close in about a week.