Is it More Profitable For Banks to Do Foreclosures or Short Sales?

When short sales get rejected, it's easy for agents to claim that banks prefer foreclosures over short sales.

In my experience, very few banks reject a short sale in favor of foreclosure when the price of that short sale offer is reasonable and the seller demonstrates a hardship. I suspect that some short sales which never make it to closing should never have been offered for sale in the first place. In other cases, the denial could have come about because the listing agent was not an experienced short sale agent and simply messed up the transaction.

If it wasn't profitable for a bank to do a short sale, the bank wouldn't do it. But the answer is a lot more complicated than that . . . read more about whether banks prefer foreclosures over short sales.

More Articles by Elizabeth Weintraub:

• How to Do a Short Sale
  
• How Foreclosure Works
  
• Short Sales vs. Foreclosures

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_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}