Author Box
Articles Categories
All Categories
Articles Resources

Foreclosure Vs Short Sale - Do You Know The Difference?

February 19, 2012 | Comments: 0 | Views: 148

I ask this question a lot because by now (after 5 years of these kind of sales) everyone buying or selling real estate is familiar with the term "Short Sale". In fact most buyers say they would prefer to find a foreclosure or short sale when looking to buy a home, but do they really know what they are getting into. A couple of quick definitions of each may be appropriate before we look at the answer to that question.

A foreclosure of course is a bank owned home where the bank has foreclosed on the property and owns the right to transfer the property to a new buyer. The price,terms and closing are dictated by the bank since they now hold title to the property and may dispose of it as they wish. A short sale is a home still owned by the seller/ mortgage holder (mortgagor) and is attempting to sell the home at a price that is less than what they owe the bank on the mortgage balance. They are attempting to sell the home for less than what is owed because they are what's referred to as "underwater" on the house where the value is far less than what the mortgage balance currently is. In a short sale however, the seller does not have final say in the closing of the home: the bank does. Although title is still held by the seller and they sign off on the sales contract the bank ultimately makes the final decision on closing because they have to accept a payoff on the sellers mortgage for less than what is owed. That will remove the lien from the property in order to close out the transaction and transfer title free and clear to the buyer. This might not sound complicated, but of course it is. Short sale transactions can take months to close and in many cases they never close. Typically there is more than one lender involved and they all have to sign off on the deal.

If you think this is a viable option for you,please use an agent that has in depth knowledge and experience in this area. A short sale can be a fantastic opportunity for either a buyer or seller but without an expert agent guided you in the deal it can also be your worst nightmare. A foreclosure sale is much less complicated and typically the bank will close as soon as you are ready. More to come!

21 year veteran in Real Estate industry,owner or Real Estate investment company, specializing in residential resale, muliti family properties and single family investment properties

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Short Sale


Foreclosure Vs Short


Foreclosure Sale

The documents are inevitable to assess your age, income, employment and residence. For the loan to be petitioned from the bank, you need the right procedure of application.The documents are

By: Simon Liva l Real Estate > Buying l November 20, 2012 lViews: 257

The main reason why people tend to be apprehensive about moving homes is that it entails packing everything in the home, transporting it and then unpacking it in the new home. The entire process of

By: Ringo Star l Real Estate > Moving Relocating l October 27, 2012 lViews: 210

There are a number of benefits to owning a second home. Buying to let is a long term investment. The property will usually accumulate value over time and also can generate rent on a shorter term

By: Alan Trotter l Real Estate > Investing in Real Estate l October 19, 2012 lViews: 240

Building a home, especially your first one, can be an incredibly daunting task - there are a number of factors, including budget and planning, that must be taken into account before any sort of

By: John K. Taylor l Real Estate > Building a Home l July 10, 2012 lViews: 333

When you're ready to sell your house, the first thing you'll probably do is find a real estate agent to help you through the process. It can be so inviting to seek out the discount Realtors who offer

By: W Josh Anderson l Real Estate > Selling l July 10, 2012 lViews: 262

You see the signs everywhere, especially in a strong economy: For Sale By Owner. For some reason, many people believe they'll do a better job of selling their homes without the assistance of a real

By: W Josh Anderson l Real Estate > Selling l July 10, 2012 lViews: 241

In today's real estate market, potential buyers frequently find short sale homes and houses close to foreclosure. Some homes have already been foreclosed and are now for sale by financial

By: Jeremy P Stanfordsl Real Estate > Foreclosuresl June 01, 2012 lViews: 203

Buying foreclosures at a distance can be challenging. Use these tips to help you make good decisions.

By: Aloysius Aucoinl Real Estate > Foreclosuresl June 01, 2012 lViews: 164

Fearing losing their house is quite nerve-racking for a number of house owners. Regrettably, foreclosures are happening a lot more frequently than previously and are frequently a result of breakup,

By: Steven Johanssenl Real Estate > Foreclosuresl May 31, 2012 lViews: 183

If you are trying to decide whether hiring a foreclosure attorney is worth your time, maybe it is time for you to take a better look at your current situation. If you have been served with a

By: Abraham Avotinal Real Estate > Foreclosuresl May 31, 2012 lViews: 157

Home foreclosure as suggested by its name means a scenario where a property owner is not able to make repayments of principle and interest repayments on their home loan, therefore the loan provider,

By: Demetrius Weatherspoonl Real Estate > Foreclosuresl May 30, 2012 lViews: 199

On the subject of purchasing a new house, most likely the primary thing on everyone's brain is if they will be able to locate the home they desire within their budget. It looks like everywhere you

By: Demetrius Weatherspoonl Real Estate > Foreclosuresl May 30, 2012 lViews: 165