Basically the real estate guide book says that a short sale is a sale of real estate property wherein all proceeds from a sale will fall far short of what is still owed the lender by way of mortgage liens that could be a first, second or even a third mortgage that the current owner simply cannot afford to pay.
Ergo, the lender other lien holders must agree to sell said property, accepting less than existing owed debts. Yet since some lien holders may not agree to “unload” the property until all homeowner obligations have been financially settled, a deficiency exists and the “in-fighting” among lien holders can go on for weeks and even months; hence the term: “There is nothing short about a short sale.”
Which Is Better – A Foreclosure Sale Or Short Sale?
Well the fact is that banks or any other lender would rather take part in a short sale than a foreclosure any day, and twice on Sunday. A foreclosure can take forever and for banks or other lenders could over time, could create a monolithic expense. Short sales believe it or not, don’t have half the headaches you get in a foreclosure.
Which Is Easier To Qualify For – A Foreclosure Or Short Sale?
This is a tough question to answer because you would think that with banks loaded up to the gills with more foreclosure inventory than ever before, they certainly wouldn’t want to compound the situation. Yet the fact is qualifying for a short sale is a lot easier than what your Uncle Fred will tell you. If you have a financial hardship or a recent change in your financial situation, your home has to be worth less than what is owed on it. This, in turn, is a good thing for a consumer looking to make a good deal.
Another factor to consider in matching a foreclosure versus a short sale is the condition of the property. A foreclosure may have been sitting unsold or not cared for going on months, even years. The owner is long-gone, the weeds are five feet tall in both yards and the current occupants are scorpions, empty beer cans, and sagebrush.
On the other hand a short sale is a far better deal for a buyer wannabe because the home is many times in far better shape and condition because the existing homeowner is still living in the home, taking care of the property, and still wishing and hoping for some blue skies and green lights to bail the family out of this conundrum.
Whether it’s a short sale or foreclosure nothing in real estate is set in stone but the consensus with most Realtors is if you can locate the perfect home for you that can be purchased quickly via a pre-foreclosure within a month or so, this may be a good option. On the other hand, if you have patience and persistence and can snag a non-distressed short sale, jump on it fast.