Deed in Lieu vs Short Sale [Difference Between the Two]

In this short, yet educational video, I will be explaining the difference between the short sale and the deed in lieu of foreclosure.

Here are other videos from this series you might be interested in:
Video #11 - this video
Full Video -

Alright everybody, let’s take a look at a short sale versus a deed in lieu of foreclosure option. Let’s take a look at availability.

As long as you meet the lenders criteria, which is typically underwater on your mortgage, defaulting on the loan and you have a good hardship, there’s a very high probability you’re going to be able to do a short sale.

Whereas a deed in lieu, it’s really a case by case basis and the lender is usually a lot wearier to do a deed in lieu foreclosure. For example, a lot of times they get sued over this, they find themselves spending tons of money in litigation and there are just other grey areas that typically will make a lender hesitant to do a deed in lieu foreclosure.

Let’s take a look at credit effects. A short sale, as we’ve discussed many times in the past, does have a negative effect but there’s numerous ways you could rebound and get back on your feet from a short sale. There’re different loan options, there’s ways you could structure those loan options, etc.

A deed in lieu foreclosure on the other hand, very similar to foreclosure. Same credit effects as a foreclosure and it typically stays on your credit as long as a foreclosure does.