Ti=
ll
recently those of us in real estate have not had to use these terms,
lately we have had several clients of ours that have asked (What =
is
the difference) or even worse and have not asked. Thats why I feel that it is important to educat=
e our
clients on the use of the different terms and what they mean.
Short Sale<= o:p>
Th=
is term
means just what it says, the property is usually in default (more other art=
icle
in this newsletter) and there is not enough equity in the home to sell it a=
nd
pay the mortgage. When you are doing a short sale you will ask the bank to =
take
less on what is owed to pay off the mortgage. There is where the problem co=
mes in, the bank has no reason to do this as they do have =
some forclosures on the books but not enough to make this =
worth
while for them yet. Thus they are not ready to deal you may put in an
offer he bank could do several things. The first is just turn down the
offer and proceed with foreclosure, the second is wait till more offers com=
e in
and pit you aginst the other buyer to drive up =
the
price, the third is come back with a price much higher and closer to t=
he
pay off, and the fourth is just say no. In any case going this route c=
ould
take up to six months to find out at the last minute you did not get the ho=
use.
Foreclosure=
Th=
e term
foreclosure means the house has been taken back by the bank and is the proc=
ess
of auction. The auction takes place at a predetermend<=
/span>
place such as the courthouse steps and I mean right on the steps. The aucti=
on
is cash , cashiers check and is sold to the high=
est
bidder. Now here is the rub, usually the there is a minimum bid and that is
what the bank is owned by the borrower plus its foreclosure fees. Now here =
is
one of the most important aspects of foreclosure auctions, if the home was
worth in todays market what the bank was owed t=
hen
the owner would have sold the home and not let it go to foreclosre
in the first place. All property is sold as is and no inspections are avail=
able
before purchase, and no disclosures are given banks are excempt
from doing this by law.