Short Sales vs Foreclosure

A Short Sale means the bank holding the current mortgage has not taken possession of the the property, however, the current owners have not been paying on the mortgage.  And 9 out of 10 also owe more than the home is presently worth.  What this means to the buyer?  It means that someone from that bank has to agree to the sale of the property for the price you the buyer offers.  The current owner must also agree to the offer, and if there is a second lender involved that lender must be contacted and agree to a settlement in order for the buyer to purchase the property.  This can take up to 90 days to get ironed out depending on the lender or lenders involved.  Yes, sometimes an we are able to close in 10 days!  Sometimes!  These are more and more the exception not the norm.

Foreclosure: the lender holding the Note has taken possession of the home.  You will be dealing with that lender in negotiations, the current owner no longer has a say in the sale.  The possitive here is the fact that there is only one lender involved.  You often have a much quicker and final response time. 

Just because a property says 'It's in Foreclosure,' does not mean all is well.  I recently had a foreclosure where the settlement was delayed because the selling lender had never recorded the Foreclosure Deed and the Home Owners Association was owned back dues.  The HOA would not provide the exact figure of the dues without the Foreclosure Deed, the lender seemed unable to locate the Deed and a new one had to be drawn up.  This involved tracking down the prior owners and getting them to sign a new Foreclosure Deed.  Whew!  Thank Heavens for Attorney's and Closing Companies who have Title Searchers that track all this paper work!

All in all ... this is a wonderful time to buy if you have the patience to wait for the deal that's right for you.