What Is a Short Sale?
A short sale occurs when your lender agrees to accept less than the full mortgage payoff amount as a settlement. For example, you owe $350,000 and the home sells for $290,000 — the lender accepts $290,000 and (usually) forgives the remaining $60,000 deficiency.
What Is a Foreclosure?
In Texas, foreclosure is typically non-judicial — meaning the lender can foreclose without going to court. The process can begin after 3 missed payments and move surprisingly fast: Texas lenders can post the Notice of Sale and complete the foreclosure auction within 21 days after the cure period ends.
Credit Score Impact Comparison
Short sale: Typically reported as “settled for less than full amount.” Credit score drop: 50–150 points. Waiting period for next mortgage: 2–4 years (depending on loan type). Foreclosure: Reported as a completed foreclosure. Credit score drop: 100–160 points. Waiting period for next mortgage: 3–7 years. Both are serious, but foreclosure has longer-lasting effects — particularly the mandatory waiting period before you can buy again.
How a Cash Sale Helps
The best outcome is selling before either a short sale or foreclosure becomes necessary. If you have any equity — even small — a cash sale at market value is far better than both. DFW Fast Close can close fast enough to stop a foreclosure in most cases and protect your credit more than either alternative.