A short sale is initiated by the homeowner, usually in an attempt to avoid the foreclosure process.
A foreclosure is started by your lender because you haven’t made good on your promise to pay them back.

Distressed Homes in Default
Not all homes that go into default go all the way through foreclosure. Many sell before the notice of default is finalized. Home buyers and investors are attracted to short sales / foreclosures because they want to buy a home for less than the market value. Sometimes sellers in default and buyers who want a short sale / foreclosure are able to see eye-to-eye and enter into a profitable transaction for both parties. However, distressed home sales are often complicated. Both sellers and buyers should seek advice from a professional before entering into a contract.

Sellers in Foreclosure
It’s all too common for sellers in foreclosure to want to ignore the problem and hope it’ll go away. Short Sales is an option to transfer title to a buyer before the redemption period ends by persuading the lender to accept less than the unpaid mortgage balance. However, not all lenders will accept a short sale. Negotiation is key.

Buying Foreclosures & Short Sale Homes
Buying Distressed Homes involves 3 ways to purchase: from the seller in foreclosure, negotiating a short sale or buying from the lender after a public auction. Buying Short Sales is complicated and can take much longer to close than an ordinary transaction. Buying Foreclosures before the home goes to a public auction involves negotiating directly with the seller. Buyers also have the option of bidding on a foreclosure at the public auction. Buyers who bid at public auctions will benefit from getting as much information as possible beforehand.

Fixing Up Foreclosures / Short Sale Homes
One way to make money in real estate is to “buy low and sell high.” Couple that principle with fixing up the home / improving it, and the amount of profit can be even greater. Many distressed homes fall into disarray and require repairs. Repairs Before Resale can boost bottom-line profit.