What's a short sale, and how does it differ from a foreclosure?
In a short sale, you offer to give the bank a seller who is willing to buy the property for the market worth, which may be less than what you originally paid, or mortgaged for.
A foreclosure is when you don't pay the mortgage and after a period of time, the bank decides to foreclose, or, collect the "collateral" on which the loan was based.
For the bank (and you) the more favorable option may be the short sale. The process takes a while, and is time consuming, but in the end, could possibly be better for both parties.
In a short sale the owner of the house has a say in whether the bid is accepted or not. Banks really don't like to foreclose and offer this option to prevent them, because it avoids some of the legal fees.
These usually take longer for the closing when purchased than a foreclosure. I wrote an entire hub on this one.
A short sale is an agreement by the lender (s) to accept an amount less than outstanding balance of the mortgage. The Seller "sells" their home to a prospective buyer subject to the lender accepting the terms and conditions. The sales price does not provide sufficient funds to payoff all the mortgages. The Seller may be relieved of any future obligations to the shortfall. A foreclosure takes place when home owner defaults on their mortgage and the lender follows the required process to take back the property or sell at foreclosure auction.
by beachbumrealty5 years ago
If you will be asked, will you consider a short sale?I have this friend who is distressed because of his mortgage debts. His attorney told him to offer his property for less than its market value. Please help, I want to...
by LVHighRise6 years ago
What do you think, is it easier to work with a short sale or a foreclosure?
by SoCalDeeDee7 years ago
Will seller get a 1099 after a Short sale?In California, if home loans (first and second) are 400K and buyer has offered 300K for short sale. Will seller get a 1099 for difference? If so, wouldn't it be...
by slimm5285 years ago
While in the process of a short sale do you continue to pay HOA fees?
by Romian14 years ago
How can you be safe from debts after a short sale?Here is the scenario: An elderly woman in her 70's is going through a short sale of her home in Massachusetts. There is also a second mortgage tied to the...
by Shepherd's Lamb14 months ago
I just want to discuss what's going on in my little head right now and hope to hear from those of you more educated on the subject.I qualified to buy a condo in 2004 (six years ago). I paid $6,000 cash for...
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