Difference Between A Short Sale And Foreclosure

Dated: 02/03/2014

Views: 1069

A short sale occurs when the homeowner is no longer able to make their mortgage payment and owes more on their home loan than what the home is worth in the current market.  Homeowner will list their home with a Realtor for the current market value and the lender will take less for the home than the amount of the borrower’s loan. When making an offer on a short sale, the seller is still involved in the process and will have to accept the offer as well.  Once the offer is accepted by the homeowner, the offer will then need to be approved and accepted by the bank . Short sales, are the first step to avoid foreclosure. Short sales are very complicated and the outcome is not guaranteed. The bank (lender) is not obligated to take a short sale and in most cases the process to get one approved can be very time consuming. A typical short sale can take anywhere from 3-6 months to close, but this can vary case by case.

Foreclosure when the Lender will takes possession of the property. Home owner fails to make the payments on his/her mortgage and have not exercised other options, such as a short sale, then lender will begin foreclosure proceedings. When the lender takes possession of the house, the homeowner is no longer a party in the sale, as they would be in a short sale situation.
Foreclosures are not sold by Realtors. Foreclosure properties are auctioned at a Trustee Sale at the Court House in the County where the property resides. Foreclosure properties must be paid for in full, with a cashiers check at the time of the auction. I do not encourage buyers to consider buying a foreclosure property, unless he/she is an experienced investor.
For any other questions about the Short Sale please feel free to call me ! Thanks
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Sheryll White

As a Full Time real estate agent for the past 23 years, Sheryll has helped hundreds of home owners in Colorado buy and sell their homes. Sheryll's easy going, no pressure style and her in depth knowl....

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