Foreclosure vs short sales

1 Reply

Benefits and difficulties of both...please share insight on time to close, ability to negotiate price, ability to obtain financing, pros and cons and any experience that may help. Thanks

There is more to it, but here is what comes to my mind quickly



  • Possibly larger discount relative to market value.
    I don’t think that there is anything that beats foreclosure in terms of the potential for discount on purchase price relative to market value.
  • Very quick sale.
  • Less competition compared to MLS or short deals because of strict terms of the foreclosures (being physically present, having the cash available, etc)


  • You can lose ALL of money if you are unlucky and didn’t conduct some thorough due diligence.
    So it is risky? Yes, very risky. If you don’t know what you are doing.
  • Hard to find financing on those property, if possible at all.
  • A very strict time frame to complete depending on the state where you are.
  • A lot of time and effort wasted researching and conducting due diligence on properties that get adjourned every single time or never come up for sale.
  • Evicting the current occupier of the property if not vacant possession

Short sales:


  • Potential for good discount
  • You can conduct your due diligence
  • Clean title transfer
  • Properties are usually in better shape than the foreclosed ones


  • Very lengthy process. It can take several months to close on short sale because of the bureaucracy of the lender.

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