| Understanding the Terms Over the last several years we have noticed people either do no know, do not understand or are confused by the terms short sale, per-foreclosure, deed in lieu of foreclosure, bank owned and foreclosure and what, if anything, can be done by the property owner in each of the instances. We thought it would be good to contact people in different stages of life, different areas, different occupations regarding these terms in hopes the will help us spread the word, so please feel free to share any or all of this information. A Short Sale is when more is owned on a property that what it can be sold for, hence, short of what is owned on it. Does the owner have any options? Yes! The owner is still in control as it is their property. They can list the property for the amount it is worth, not what is owed. The owners give a permission form along with other required information to the agent(s) when then deal with the lender. Depending on the lender,, it may take 60 - 90+ days for a short sale to close. A Pre-Foreclosure means you have not met your payment obligations to a lender and either they are or soon will be initiating steps to either get their money or get you out of "their" house. The same forms will be needed for the lender. Deed in Lieu of Foreclosure is when the owner "signs" the deed over to the lender rather than let the property go into foreclosure. The lender(s) are now legal owners. Foreclosure is the legal proceeding by which a lender terminates the owners interest in the property after the owner has failed to make payments. The foreclosing lender takes possession of and/or sells the property. The foreclosure process takes a minimum of one (1) year. Bank Owned/REO Properties are properties which have been foreclosed on and the lender bought the home at the auction (most likely because no one bid enough or no one bid at all on the house). In a Short Sale and Pre-Foreclosure, the owner of the property can list the property and accept and/or counteroffer with a buyer. The lender has final say and does have the right to reject or counteroffer even after there is an accepted offer by the seller. The sale is a normal, but takes longer to close than a property not in either status. Deed in Lieu of Foreclosure, Foreclosure, and Bank Owned, only the lender can sell the property. What does it do to your credit? A Short Sale and Deed in Lieu of Foreclosure puts a "ding" on your credit and falls off in 2 - 5 years. A Foreclosure is a bit more serious and falls off in ten (1) years and will make it more difficult to get a loan after is has been filed. We hope this information has helped clear up the terms. If you or anyone you know has any questions, please feel free to contact us. Over the past few years we have assisted in numerous Short Sales and Pre-Foreclosures and were able to assist the sellers in finding a place to live and start re-establishing their credit. This can be stressful but sometimes it is the only option. Be assured that anything we discuss is confidential. Thank you for taking the time to read this information and for sharing with anyone who has questions. If you have a question or need information, please feel free to contact us. Mike: mike@equity55.com Charlene: charlene@equity55.com |