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Foreclosure or Short Sale? That Is the Question!

January 10, 2011 | Comments: 0 | Views: 82

One question that I often receive, nearly on a daily basis, is regarding which distressed properties are the best to purchase. Short sale and foreclosure horror stories seem to be the main topic in real estate these days, further perpetuated by the media. In 'real life' these distressed properties are selling--both foreclosures and short sales--but, what is the difference between the two?

What is the difference in a foreclosure and a short sale and which is the best one to buy?

In response to the initial question - The difference between a foreclosure and a short sale is that a foreclosure is owned by the bank and a short sale is still owned by the homeowner of record. That homeowner is dependent upon the bank(s) approval of the sale of their property for less than what they owe on their mortgage(s). This is otherwise known as 'third party approval.' The short sale process can take awhile but, there are different schools of thought as to which is the best to purchase--short sales or foreclosures. While the bank does have the 'final say' as to whether or not the short sale will be completed, the bank is not a party to the Contract, also a common public misconception.

Consider this--Many homeowners who have lost their homes to bank foreclosure, leave their homes in anger and tend to stop maintaining or caring for their home, sometimes removing appliances and light fixtures as they are asked to leave their homes. These homeowners oftentimes even maliciously destroy their former homes as they leave them. Many short sellers WANT to protect themselves from the 7-10 years of bad credit that a foreclosure can bring them, therefore they do everything that they possibly can to keep their homes maintained so that they CAN get a buyer and get out from under their mortgage with as little damage to their credit as possible.

Short sales can and often DO take longer than a standard home purchase or even a foreclosure to buy but, the home that you buy, compared to other options (standard resale or foreclosure), can be in better condition and at better price as well.

Buying a foreclosure is a much simpler process for you and your agent but, if you have patience, a short sale can honestly be the better investment, oftentimes requiring FAR less rehabilitation for you, as the buyer.

As an acknowledged leader in the Charlotte NC Real Estate industry, Debe provides ethical, full-service for the luxury or first time home buyer or seller--service that is clearly distinguished as the benchmark for attentiveness, professionalism, knowledge & expertise. Her customer service has recently been recognized by Quality Service Certification (QSC) as one of the nation's top 250 agents.

Education is key to Debe's success as she is a self-proclaimed lifetime learner. She trains agents across the nation in real estate marketing and sales and is the author of the popular blog. Her writing has propelled Debe to the top blogging position in her home state of North Carolina.

Debe Maxwell, CRS, Realtor/Broker

Source: EzineArticles
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