Tehama Country Real Estate

Tehama Country Real Estate – 3 What Is the Difference Between A Foreclosure and A Short Sale? Real Estate Spotlight By Alex Mason challenges today. Home values sinking under water have created a new set of home owner con- cerns accompanied by new terms and vocabulary. T Many people have not yet adapted to the termi- nology of foreclosure versus short sale, often mix- ing up the two options when the mortgage can no longer be sustained. The two terms, foreclosure and short sale, are somewhat interrelated and often confused. To set the record straight, let's look at each maneuver in a nut- shell. What Is a Short Sale? A short sale is a remedy to save the distressed property from a seizure by the lender. Home owners who believe that they can no longer han- dle their house payments or are burdened with a proper- ty due to relocation issues may elect to sell the home for less than they owe through a short sale. The short sale is designed to move the property quickly before a Notice of Default is issued and foreclosure proceedings begin. This tactic is often the last resort before a distressed property hits the courthouse steps for auction. Although the short sale can release a distressed borrower from the property, there is often zero profit in the sale of the home for the owner's pock- et. However, their credit damaged less than a fore- closure, and he or she is free to walk away. The short sale should be handled by a real estate specialist that has plenty of experience with suc- cessful short sales. Time is of the essence with a short sale to ensure the home owner does not fall behind on the mortgage payments. A few missed payments could send the home into default, so the short sale must be smooth sailing to beat the dead- lines. The short-sale real estate agent will advertise the home as a discounted property, yet try to recover as he real estate industry is facing some tough much for the home as possible with the sale. The short sale tactic involves the bank, so each offer on the property is subject to the lender's approval. ? ? ? The short-sale agent must have a strong working relationship with the lenders and be able to sell the property before the homeowner suffers financial consequences. Ashort sale can be tricky, so if this is the right pathway for you, be sure to shop wisely on who will represent your home with the short sale. What Is a Foreclosure? Aforeclosure is the last resort for a distressed bor- rower that can no longer make payments on the property. Perhaps he or she put their home on the market as a short sale, but there were no takers on the deal. ANotice of Default will be issued to the property owner which gives the bor- rower a small grace period to bring the mortgage current. If the borrower cannot make the payments, the property will be seized by the bank or private lender. If you are struggling with your mortgage pay- ment, you must immediately contact your lender. Many finance companies are eager to work with a distressed borrower to avoid foreclosure proceed- ings. Despite popular belief, the lender does not want to take the property with a foreclosure. This process costs them money in the long run with insurance, taxes and the responsibility to find a new owner. They are far more inclined to sit down and negoti- ate to keep the current owner in the home. To avoid foreclosure, honestly evaluate your financial status, set forth a budget, then make the necessary contacts to correct the issue. You may wish to do a short sale to quickly release the cum- bersome property, seek an attorney for a bankrupt- cy escape or work out a new payment program with your current lender. Alex Mason is a former real estate agent and mortgage broker living in Los Angeles.

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