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What's the difference between a short sale and a foreclosure? This is a question we hear a lot, so we thought we would answer it for you here today.
Short sale
If someone purchased a home for $300,000, and still owes $290,000 after a few years, even though the home is now only worth $270,000, they will likely need to sell the home. A short sale is when you go to the bank and ask them to forgive the difference between what you owe and your home is actually worth: in this case, $20,000. Whether the bank will allow a short sale depends on the financial circumstances. People often have a short sale if they lose their job or have to leave town in a hurry. Most banks will grant you permission if the circumstances call for it.
Foreclosure
A foreclosure happens when someone doesn't pay their bills and the bank takes over the property. Here in North Carolina, a deed of trust is what holds the lien holder to the property. In other words, if you don't pay, you don't stay. Once it is a proper foreclosure, the bank will own the property. In these situations, you'll often see the home put up for auction.
There aren't many short sales or foreclosures left in our market, but when they do come they're going quick. You need to make sure you're working with a great agent if you want to scoop up a great deal! If you have any questions about this topic, or if you need real estate assistance of any kind, give us a call or shoot us a quick email. It would be our pleasure to serve you!
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