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Replies (3)
- Carl Henker, "Carl Henker"
- Contributions:755
A short sale transaction is when an owner is willing to sell a property at the market value which is less than the amount owed on the loan. The lender on the loan being paid off must agree to accept less than the principle balance as payment in full to allow the sale to take place. Sales price $200,000 loan balance $225,000 lender accepts $195,000 as payment in full and allows difference to be used by seller/owner to cover closing cost. Transaction can take several months plus to close due to lenders approval need in addition to sellers acceptance.
The foreclosure transaction is when the lender has taken the property back form the owner and sells the property at a fair market value. Lender is the seller and accepts your offer. Closing can be 30 plus days in stead of the sometimes months for the short sale.
Good Luck
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3428
Agree with Carl, from the buyer perspective, the foreclosure or "REO" is often much more attractive since the transaction can complete timely as opposed to several months of wating with uncertainty on a short sale.
As far as paying the current owners "burden", it is true that does happen on short sales, I have seen many where they want the buyer to pay deliquent taxes, delinquent HOA fee, sellers customary portion of settlement fees, etc.
As far as paying the current owners "burden", it is true that does happen on short sales, I have seen many where they want the buyer to pay deliquent taxes, delinquent HOA fee, sellers customary portion of settlement fees, etc.
- Mark Nehs, Wisconsin, "WI Mortgage Lender"
- Contributions:250
You don't pay either way. The bank has taken on the property and will sell for as much as they can in the foreclosure example or the additional amount the seller would owe in the short sale example is also not your responsibility. The biggest difference between the 2 as a buyer is as Carl explained.
What is a short sale vs a foreclosure
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