A Short Sale happens when a Borrower cannot pay his mortgage and negotiates with his Bank a discounted price.
The Borrower will ask his Lender to accept a smaller amount than the amount owed on the property.
The Lender will then take a loss.
The property can be put for sale before the negotiation, or after the negotiation where we know how
much the bank will accept.
Also, the bank will ask the potential buyer for a proof of funds. The bank will not accept to take a
loss for a buyer who cannot close on the property later.
A short sale is typically a longer process than a normal sale. It is also more opaque because the seller
is talking to his bank or his attorney, or the bank's attorney, the seller's agent is talking to one of
the attorney, and it is quite difficult to get a straight and quick answer.
The bank can also consider several offers at the same time and choose the best one.
In today's market Short Sales are one of the best opportunities to purchase a real estate property.
You will need to have the funds ready and to be patient.
A Foreclosure follows the payment's default from a Borrower on a real estate property.
The Lender will obtain a judgment (the foreclosure judgment) to get possession of the real estate property.
The property can then be auctioned, or sold on the normal real estate market.
Foreclosures are also a great opportunity to purchase a real estate property at a discounted price.
Here too the Lender will also ask for a proof of funds, and the potential Buyer will have to be patient.