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What is a Foreclosure Sale?
When a homeowner is no longer making mortgage payments the lender will take possession of the property through the Foreclosure process. Once the lender "owns" the property it is prepared for resale and a real estate company is retained to market the home, negotiate a sale, and close the transaction for the new buyer. Most foreclosure sales are relatively smooth transactions that can occur very quickly and can be a great investment for the purchaser of the home. One caution for the purchaser; make sure you have the opportunity to thoroughly inspect the property before completing the transaction. A neglected property may be no "bargain" once any defects are discovered.
What is a Short Sale?
A Short Sale occurs when a homeowner cannot sell the property for a price high enough to cover the payoff of the mortgage balance and costs of sale. A large percentage of these homeowners have other assets that can be liquidated to offset the shortage but if this is not the case the owner may appeal to the lender to take a "short" payoff amount for the loan. Unfortunately, most lenders have no incentive to take a lower payoff so these transactions rarely work out. Many potential buyers have wasted much time and money attempting to get a "deal" on a home purchase that will likely never be completed.
Want more information about purchasing a Foreclosure or Short Sale as your next home or as investment property? Call or email today to learn more!
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