Foreclosure vs Short Sale – Is There a Difference In TX?

Whether you’re a buyer or a seller, a foreclosure vs short sale are different and each present different advantages and difficulties, in most cases, with long term impact to your credit.  The differences are important to understand.

What Is A Foreclosure In Fort Worth TX?

In simple terms… “A foreclosed home is one in which the owner is unable to make his mortgage payments and the bank repossessed the home” (source).  If you are not making payments on your mortgage… your lender has the right to foreclose on your property so they can attempt to recoup their money that was lent to you. 

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Click here to AVOID Foreclosure Today!

A home is typically foreclosed on when a borrower fails to make their mortgage payments.  The lending institution assumes ownership and possession of the property, evicting the borrower.  These properties are then sold at auction or more traditional means utilizing the service of real estate agents.  A foreclosure can damage the credit rating of a borrower, and make it very difficult to obtain a mortgage for many years to come.

Depending on the state that you live in… a foreclosure can work in different ways.  Check out the foreclosure process information over here at the HUD Government website.

**** Please be sure to scroll down and watch the short video I created for you ****

What Is A Short Sale?

In a short sale, the home is still owned by the borrower.

The definition of a short sale is… “short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders (mortgage co) agree to release their lien on the real estate and accept less than the amount owed on the debt” (source: Wikipedia)

In some cases, a short sale is an option agreed upon by borrowers and lenders.  In a short sale, the home is sold for less than the outstanding balance of the mortgage.  The unpaid balance (known as the deficiency) may or may not still be owed by the borrower.

This option typically takes some time, as a few different lending institutions may own the mortgage.  All parties who have a stake in the property must agree to the terms of the sale, and a potential deal could fall through if even one lender doesn’t agree.

Foreclosure vs Short Sale – Your Options

While both options can have ramifications, a short sale often has less of an impact on the borrowers creditworthiness.  A foreclosure could impact a borrower’s credit score by 300 or more points, where a short sale may only dent the credit score by 100 points.

Borrowers who are foreclosed on are often ineligible to purchase another home for 5-7 years with a traditional mortgage, where under certain circumstances, a short sale borrower can purchase immediately.

As many Americans struggle with an economy that has yet to completely recover from the 2008 crash, folks are having a hard time making monthly mortgage payments.  Choosing between a foreclosure vs short sale (or a 3rd option…  selling your Fort Worth house fast to a local house buyer / investor such as TMC Property Solutions, is an easy choice for a borrower having troubles paying their mortgage on time.

Sometimes, lenders are willing to work with borrowers to complete a short sale, to avoid the fees and time consuming process of conducting a foreclosure.

Our suggestion is always this.

  1. Talk with your lender and discuss ways that they can work with you on your loan.  We offer this service where we can help guide you in the right direction if you run into issues with your lender… just reach out to us on our Contact page and we’ll discuss your situation.
  2. Attempt a short sale or other program your lender may have that forgives part of your loan, creates a new / more affordable monthly payment so you can get back on your feet, etc.
  3. If the bank isn’t willing to work with you very much… your best option may be to sell your house.  Work with a local real estate house buyer service such as TMC Property Solutions to sell your house fast for an all-cash offer.  If you’re interested, we can look at your situation and make you a fair offer on your house within 24 hours.  Just fill out the short form on our website here >>
  4. Foreclosure.  Last resort is to let the house fall into foreclosure.  This is the worst possible scenario.  It’ll harm your credit and you could still be left with money owed to the bank even after the foreclosure is finished.

To learn more about the effects of foreclosure can have read our article we posted a few weeks ago here.

$$$$ Please watch the short video on How To Avoid Foreclosure in Fort Worth here $$$$

By knowing your options, you may be able to dodge a significant long-term impact to your credit score, allowing you to purchase a new home when your situation improves.  A foreclosure on your credit report makes that possibility extremely difficult for 5-7 years, so if you have the opportunity, a short sale can be the better option, and better yet, sell speak with a local house buyer such as TMC Property Solutions about possibly buying the house outright and/or taking over the payments and bringing them current.  Both options STOP your foreclosure and prevent your credit from getting worse.

Have a pending foreclosure?  We’d like to make you a fair all-cash offer on your house.

Give us a call anytime at (817) 550-5069 or
fill out the short-form on our website today! >>

TMC Property Solutions

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TMC Property Solutions is an accredited business and A+ rated members of the Fort Worth BBB.


About masterrei

TMC Property Solutions is a Veteran owned and operated small business and is your premier house buyer in the Dallas Fort Worth metroplex based in Weatherford, Texas. Tim has been helping families with their housing situations since 2000 buying houses fast in Fort Worth and the surrounding areas, locating and offering Investor deals at deeply discounted prices. Tim Cook is a dedicated real estate professional, REI mentor, and entrepreneur with extensive training and experience in buying houses fast in difficult situations and helping hundreds of families with their housing needs all across the north Texas, Dallas, Fort Worth, Weatherford, and surrounding areas and is an expert in creative problem solving for home owners needing an out-of-the-box solution that works for today's difficult real estate market and teaching other investors to do the same. Tim is also the founder of the West DFW REI Group and would like to invite all Texas investors to join him at Contact us for a free no-obligation consultation and let us know how we can help you or visit us online at Investors please visit and take advantage of all the free Investor Resources. To Your Success! Tim Cook, President

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