The difference between a short sale and a foreclosure is that with a short sale the seller still has control of the property, whereas a foreclosure is bank owned, (and also called a REO, real estate owned).
Here are the definitions:
A short sale is a sale which the sale proceeds fall short of the balance owed on the property’s mortgage. Typically this occurs when a borrower (seller) cannot make the payments on their loan. The lender decides that selling the property at a loss is better than the cost of foreclosing, which can cost the lender upwards of $70,000-$80,000! Both parties must consent to the short sale process. This agreement does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.
Continue reading 'Short Sale vs. Foreclosure'»
I’ve been working on a short sale, with Countrywide, since December 3, 2008. There is a 1st and 2nd mortgage on this gulf front condo, both with Countrywide. As of yesterday, my buyer backed out of the contract…that’s just over 4 months and I still don’t have an answer. The file is yet to be submitted to the investor who actually owns the loan. What in the world is Countrywide doing?
How long do lenders expect buyers to wait? There are agents who get mad at the buyer for “walking”, but can we really? In this case, my buyer is not at fault. The closing date and extension date to close has come and gone. Until the lender (seller) has accepted the offer, the buyer can withdraw their offer at anytime…short sale or not.
Why is it some lenders can process their files so much faster than others? In fact, as I’m typing this post, I received an email from a different lender with approval of a (different) short sale contract. That offer was submitted on February 6. Granted the price is much lower and so is the deficit to the seller, but it’s approved. We will close within 30 days. That’s about 90 days from start to finish. Not unreasonable.
Continue reading 'How Long are You Willing to Wait?'»
In these challenging times, we MUST keep our sense of humor…especially us Realtors 
Happy Halloween everyone!
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Debbie James
850.450.2000
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I’ve had a lot of people ask me what the difference is between these 2, so I thought I would help clarify…
Question #1: Short Sales versus Foreclosure Sales – What is the difference between a Short Sale and a Foreclosure Sale?
Answer: Foreclosure – “The legal process in which a mortgagee (lender) forces the sale of a property to recover all or part of a loan on which the mortgagor (borrower) has defaulted.” (The Dictionary of Real Estate Appraisal)
Short Sales are not Foreclosure Sales but they are sales which have some duress involved. In Short Sales, the owner often owes more on the home than it is worth, and is generally behind on the payments (also referred to as being in an “upside-down” position). The lender, hoping to avoid the expense and time involved in a foreclosure, allows the owner to list the property, with the condition that the lender can approve the sale price. The agreement may relieve the owner from an obligation to pay for the loss, or it may leave the owner open to a deficiency judgment, depending on the agreement. As a result of a Short Sale, the borrower may also face additional tax consequences as the forgiven debt may be considered as income.
Continue reading 'Short Sale vs. Foreclosure Sale'»
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