What does 'short sale' mean in real estate mortgage terms? How does it differ from foreclosure?
Question:
Answer:
A short sale in real estate occurs when the outstanding obligations (loans) against a property are greater than what the property can be sold for.
Like if you owe more than the property is worth because of a failing economy or a neighborhood change. It has nothing to do with foreclosure.
Read the full context of the statement around it and it will instruct you what the lender means.
In simple terms, the bank is willing to sell the property for less than is owed on it before they take it back. Foreclsoure is the taking back of the property then selling it. It is better for the bank to sell the property and take the loss before they take it back because it not only saves time and money, but it limits their losses and doesn't show on their books as badly.
A short sale is when the bank discounts the amount you owe on your loan so you can sell your house to someone.
A foreclosure is when the bank sells your house for being late on your monthly payments.
A short sale can affect your credit in a similar way as a foreclosure; however with a shortsale that is negotiable, and with a foreclosure it is un-negotiable.
Thomas Rushing
Golden Lily Properties
"We Buy Houses"
Thomas@Goldenlily.net
(866) 800-1002
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