What's the Difference Between a Foreclosure and a Short Sale?
By www-thehavasuhome-com April 10, 2019
Small model of house chained

Everyone gets excited about moving into a new home. Nobody thinks about what happens if you fall behind on your mortgage payments. A decade ago, the Havasu real estate market experienced a devastating downturn, just like the rest of the country. Luckily, things have turned around. Unfortunately, some people still find themselves struggling to make their payment each month. When that happens, you might find yourself forced into the foreclosure or short sale of your real estate in Lake Havasu. Do you know the difference between the two? Are there any other options available?


The foreclosure process can begin as soon as you miss just one single payment on your real estate in Lake Havasu. Usually, the mortgage company registers a Notice of Default with the Mohave County Recorder’s Office within three to six months of non-payment. You have 30 to 120 days from the receipt of your Notice of Default to make arrangements to either pay the balance of what you owe or sell the property. If no agreement can be reached, the bank takes back your property and you must leave.

A borrower’s credit score can be hit hard with a foreclosure. You may see your score drop by as much as 300 points. And it stays on your credit for seven years. Also, you won’t be eligible to purchase another home on the Havasu real estate market or anywhere else for at least five years. And only if your credit score has come up sufficiently to qualify for a mortgage. However, if you owe less than your home is worth, you might be able to sell your property before foreclosure sets in. It can take some time to find the right agent, market your home, accept an offer, and close escrow. So, you need to start looking for a Lake Havasu real estate agent to begin marketing your property right away.

Short Sale

If you owe more than your real estate in Lake Havasu is worth, you might need to consider a short sale. Unlike the name suggests, a short sale is anything but short. First, you’ll need permission from your lender to sell your property for less. Then, you’ll need to put your home on the Havasu real estate market. Once you receive offers on your house, you’ll need to submit them to the lender for their approval. They may require you to pay for repairs or meet other contingencies requested by the buyer in order to make a short sale happen.

While a short sale takes more time and, perhaps, a little more effort, it is preferable to foreclosure. For one thing, it is far less damaging to your credit. While it also stays on your credit for seven years, most borrowers don’t have to wait to purchase a new home. Of course, you still need to meet lender requirements for approval. This can be tricky if the reason you were selling your home in the first place was due to financial hardship. But, if you get your finances back in order, you could be a new homeowner in the next year or two.

Other Options

Don’t want to sell your real estate in Lake Havasu but are still having trouble paying your mortgage? Ask your lender for a mortgage forbearance. This allows you some short-term relief from your monthly payment. You’ll need to explain your hardship to the lender. As long as you have been a borrower in good standing, your lender will be more amenable to this temporary stay of payments. Typically, they last anywhere from 30 to 120 days.

Another option to selling your home is a loan modification. This allows you to change the terms of your loan by lowering the interest rate, extending the life of the loan or skipping a few payments. Any missed payments get added onto the end of the loan. So, you still have to pay for everything. But, in the case of a temporary hardship like a job loss or death in the family, a loan modification may be just the relief you need to get back on your feet. And you won’t have to sell your home in the process.


Alexis Steel – 928-303-2199
Keller Williams Arizona Living Realty
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Alexis Steel

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