Colorado Springs 80921 Home Buyers Learn The Difference Between a Short Sale vs a Foreclosure

By
Mortgage and Lending with NMLS #384936 NMLS #384936
Colorado Springs 80921 Short Sales and Foreclosures
www.HomeBuyersEd.com

Although distressed sales have been decreasing on the real estate market since the subprime mortgage crisis, there will always be short sales and foreclosures on the market. In fact, last month according to RealtyTrac’s Foreclosure report, there was the first annual increase in foreclosures since July 2012.
So what is the difference between a short sale and foreclosure when you’re the buyer? Here’s a break down of definitions and the benefits of each.

What is a Short Sale?

A short sale happens when the owner of a property puts their home up for sale and does not have the money to close the transaction and needs an approval from the lender. Typically with short sales the homeowner owes more on the home than it’s worth and they are in danger of being foreclosed on by the bank.
  • It’s called a short sale because the lender is shorted the full amount of the loan. If the bank accepts the short sale they agree to take less than what is owed on the loan and forgive the rest of what the current borrower owes on the house (if the real estate agent negotiates this into the contract and is agreed upon by both parties). The homeowner initiates a short sale and the owner, not the bank, sells the home.
  • Colorado Springs Short sales are notorious for taking a long time to close, if they ever do. The sellers must qualify for the short sale which can be a lengthy process, and that’s just the beginning. All the lenders that hold a lien on the property have to agree to the sale as well. If the first mortgage has been re-sold by the original lender, it may now be owned by multiple banks. Also if there is a second mortgage on the house, the lender(s) in the second mortgage also may be lienholders.
  • Getting all lenders to approve a short sale takes time and could even prevent the deal from closing if a lender does not agree or if the seller can no longer make mortgage payments during the long wait and foreclosure ensues.

  • Benefits of buying a short sale home
  • Typically short sales are in better condition because they have been occupied. Foreclosed, unoccupied properties can quickly fall into disrepair.
  • You can buy with a loan. Typically foreclosures are done as bank auctions and require a full cash payment upfront. Short sales on the other hand can more likely be obtained with a mortgage loan.
  • The current owner goes freely – no messy eviction. In a foreclosure if former owner has not vacated the property you will have to pay the local police to evict them and you have no control over the state in which they leave the house.
  • What is a Foreclosure?
  • A foreclosure is when the bank initiates to take back a property because the homeowners have stopped making their mortgage payments. Once the borrower has missed three consecutive payments the bank can legally foreclose on the property. The lender initiates a foreclosure and the bank, not the former owner, sells the home. You cansearch Colorado Springs Foreclosures for sale HERE to get an idea of what’s on the market today.
  • You buy in cash, as is. That means you don’t get to see the property’s interior. If the plumbing is ruined, the walls are cracked and there’s mold, then it’s your problem. As the new buyer you are responsible for all cosmetic and any legal issues that come with the property.

  • Benefits of buying a foreclosed home

  • Typically faster than a short sale. A short sale is not approved by the bank and may not be even after you make an offer. A foreclosure on the other hand is already in the banks hands.
  • Typically cheaper than a short sale. A foreclosure is generally the lowest possible price you will get for a home.
There can be a lot of paperwork and hassle associated with a distressed home sale however you could walk away with an amazing deal on a new home. If you have more questions about a specific short sale or foreclosure you’re interested in, talk to Kevin Guttman, an expert Colorado home loan advisor. You can find a First Team agent to answer all of your questions by searching online or give him a call aat 877-251-9709
Email us at help@coloradohomeloanteam.com

Colorado Home Loan Team - We Finance Dreams
Colorado Home Buyers - Statewide
Kevin Guttman
Home Loan Advisor
Sr Mortgage Banker
Colorado Springs, CO. 80920
877-251-9709
www.HomeAndLoanExperts.com
www.FHAHomeLoansApproved.com
www.VAHomeLoansApproved.com
www.ConventionalHomeloansApproved.com
Posted by



We help Colorado clients finance their dream and

get the best rate, program, fees, & payment they qualify for!

 

Kevin Guttman

Certified Reverse Mortgage Planner

Home Finance Advisor

Financing Your Dream

Colorado Springs, CO 80920

877.251.9709

kevin.guttman@gmail.com 

www.ReverseMortgageAdvisorsUSA.com

www.ColoradoHomeLoanTeam.com

www.HomeAndLoanExperts.com

 
 
 

 My FREE  Mobile Mortgage APP                                                                                                                                                                          Go to:http://mtgpro.co/25ygy 

 

 

Description: Description: Description: Description: Description: cid:image008.jpg@01CCE250.15948DE0

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Buying
Groups:
Mortgages
Investors
Mortgage Marketing Tips and Strategies
Real Estate Investments
Colorado Real Estate
Tags:
colorado springs foreclosures
colorado 80921 short sales

Post a Comment
Spam prevention
Spam prevention
Post a Comment
Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainer
272,303

Kevin A. Guttman-Author, ReverseMortgageSpecialist

877-251-9709
Ready to Buy? I can help you!
*
*
*
*
Spam prevention

Additional Information