What is a short sale?
A short sale is when a homeowner tries to sell their property before going into foreclosure. The homeowner will contact a Realtor to negotiate with his/her mortgage company, in order to sell the home - even if the loan is greater than the market value - to avoid foreclosure. The home is placed on the market and sold in the usual manner, however the mortgage company will need to approve any offer submitted on the property. Short sales often take longer to close, due to the wait time for bank response.
A short sale benefits both the home buyer and the home seller. The home seller can walk away with less damage to their credit, whereas going into foreclosure will do long term damage to credit. The home buyer can find great deals on these short sale homes. Essentially, both parties win.
If you or someone you may know is having difficulties making payments, or fear that they may begin to struggle with their mortgage in the future, a short sale could be a great option. A homeowner doesn't necessarily have to already be behind on payments to begin the short sale process.
What is a foreclosure?
A foreclosed home is bank owned. They are often referred to as REO properties, bank owned properties or corporate owned properties. These homes are for sale at market value, but often priced very well for quick sale. As a home buyer, it's a good idea to keep in mind that foreclosures are often in need of work (not always), but are priced accordingly.
Both short sale homes and foreclosed homes are normally sold "as is". What you see is what you get.
If you would like more information on short sales and foreclosures or how you can find them, please call my toll free 24 hour recorded information line @ 1-800-667-1677 ext. 1035.