How Do Short Sales And Foreclosures Work?

Deals on distressed homes are real—but only if you know how to navigate the maze. We break down short sales and foreclosures in plain language, showing where timelines stretch, where lenders draw hard lines, and where smart preparation turns a risky bet into a confident purchase.
First, we clarify the fundamental difference: a short sale is a home on the path to foreclosure that still needs lender approval to accept less than the mortgage balance, while a foreclosure is already bank-owned. From there, we map realistic timelines, why lowball offers often fail, and how lender valuations shape negotiation power. You’ll hear how winterization affects inspections, why buyers might pay to unwinterize and rewinterize, and how FHA and VA standards can derail a deal if key safety items aren’t addressed.
Then we get practical. We walk through must-do inspections—full home, roof assessment, sewer scope, and more—and explain why spending upfront saves thousands later. We share red flags for REO listings, how to manage utility activation, and when an “as is” stance is negotiable. For sellers in hardship, we compare the credit impact of a well-executed short sale to the long tail of a foreclosure, including potential deficiency judgments and the possibility of a 1099 for forgiven debt. Throughout, we highlight how an experienced realtor streamlines paperwork, sets expectations, and navigates bank processes that can overwhelm even seasoned buyers and sellers.
If you’re weighing patience against price, this conversation equips you to choose with eyes open. Subscribe for more real-world guidance on Colorado Springs real estate, share this episode with someone considering a distressed purchase, and leave a review with your top question—we might feature it next.

To learn more about RE/MAX Properties Inc. visit:
https://www.LoriThompson.REMAX.com
RE/MAX Properties Inc.
Colorado Springs
719-332-1807