Buying a Foreclosure or a Shortsale property could be a great investment. These are a form of distressed properties-allowing the buying to potentially purchase the properties at a substantial discount. The primary difference between a short sale and a foreclosure is in who is selling the property. With a short sale, the bank allows the borrower to sell the home for less than the outstanding loan amount. Foreclosure is when the bank seizes the property from the borrower and attempts to sell it to satisfy the outstanding loan amount.