| In recent years the terms "short sale" and | | | | power to do so since they are not the seller. The bank |
| "foreclosure" have become buzz words amongst | | | | is countering the payoff or net amount they will be |
| realtors, investors, and the public. It is very important to | | | | receiving once they the short sale is closed. While this |
| know the difference between the two when searching | | | | happens all the time just keep in mind that the bank is |
| and considering putting an offer on these types of | | | | only approving a payoff to the property. If conducted |
| properties. Just simply knowing the difference can | | | | correctly this process should take between 60-110 |
| assist you in many ways of the process further | | | | days depending on what banks are involved and who |
| helping you become successful in purchasing the | | | | is conducting the process. |
| property. | | | | A foreclosed home, otherwise known as an REO (real |
| A short sale is when a lender agrees to take less than | | | | estate owned), is when a bank has already foreclosed |
| what is owed on a property. This can be a longer than | | | | on a property and now owns it. You will find a much |
| expected process in most cases. It is important that | | | | faster response time in getting your offer accepted |
| you understand the short sale process before placing | | | | with a bank owned foreclosure or REO. Banks need |
| an offer so you do not waste your own time. First | | | | to liquidate their assets once they are repossessed as |
| thing to remember is that the bank does not own a | | | | soon as possible. |
| short sale. The bank is only a lien holder of the | | | | In this market you may see large discounts on |
| property and the seller is still the seller in the | | | | foreclosures and others not so much. To increase |
| transaction. This is the most common mistake when | | | | your chances of getting your offer accepted you will |
| making an offer to a seller on a short sale. | | | | want strong terms such as a quick closing date and |
| The seller remains the seller of the property until the | | | | strong sense of financing. Be ready to move quickly |
| title of the property is transferred via foreclosure. | | | | when trying to purchase a foreclosure. |
| Many people tend to think that all offers must be | | | | A negative of a foreclosure is that you are most likely |
| presented to the bank when they must be presented | | | | competing against many other buyers seeking these |
| to seller only. If the property does get taken back | | | | types of properties. You may also tend to see these |
| through means of foreclosure then it will become bank | | | | in worse condition than you will typically see a short |
| owned. | | | | sale since they tend to have been sitting for a while |
| A seller has the ultimate decision on what offers the | | | | causing lots of wear and tear on the property itself. |
| bank sees since they still remain the seller of the | | | | Make sure to do your homework when putting in an |
| property. Believe it or not, but if you find yourself in | | | | offer on a foreclosure. Do not expect to get any type |
| negotiations with a seller in this situation and the bank | | | | of credit for repairs since it would be rare to receive |
| counters your offer they technically do not have the | | | | such. |