What is the Difference Between a Short Sale and a Foreclosure Sale

Around 2007 the real estate market in Florida

changed and we saw an influx of short sale transactions. We still have a good number of homes for sale as a short sale but in far fewer numbers than before.  So what exactly is a "Short Sale"?  When a homeowner owes more on their home than the market value and asks the bank who financed the home to accept a payoff amount that is less than they owe.  The homeowner lists the home for sale at fair market value and the bank decides whether or not to accept the offer from the buyer.  The short sale process is more involved for the homeowner and their agent and from the buyers side, the process is long and there is no guarantee you will get the home for the price you offered (or at all) even though the home owner signed a contract to purchase.  Every short sale is different and the transaction hinges on the seller providing the bank with all the required paperwork and you may not get an answer on your offer for 60 days. 

If you want to sell your home in western Pasco county Florida and think you need to do a Short Sale, contact me. I have the experience and professional short sale negotiator to assist you.

A foreclosure or (REO) sale is when the bank who financed the home has taken ownership because of non payment by the homeowner by enforcing their lien. Florida is a lien theory state where you own the home and have your name on the deed from the day of closing even if you are financing the purchase. Your bank creates a "mortgage" which is a lien on the property which holds it as collateral for your loan. Basically when you buy a home, you are using the house you do not own yet as the collateral for the loan. Since we are lien theory the bank must foreclose on non paying home owners. A foreclosure is a legal action taken by the bank to gain ownership.  The case must go through the court system before the bank becomes the owner. It can take up to 2 years in Pasco county for a foreclosure to be finalized and the bank get title. 

When you look to buy a foreclosed home you must keep in mind a few things:

• Hire a Realtor(R) who has experience with foreclosure sales. The process is different from any other sale and you can lose the home if your agent is not competent.
• Forget logic, reason and emotion. Your buying the home from the bank and they only accept highest and best offers and we are dealing with a company not a person.
• Homes are sold "As-Is" and you amy be required to pay the Sellers state transfer tax at closing so you will want to figure that into your available cash as it will be part of your closing costs. 
• You have the right to inspect the home and decide not to buy it based o the home inspection.
• If you finance with FHA and the FHA appraiser has repairs that are required, the bank may do the repairs up to a certain dollar amount so be sure to read the real estate addendum the bank has you sign.
• Try to get your inspections done fast and put a short inspection period in the contract. 
• The Bank DOES NOT DISCLOSE anything. They know nothing about the home. You and your agent need to do your due diligence. Pull permits to search age of roof, a/c etc..check for geological reports for settlement issues, have your agents preferred title agent run quick search for liens or assessments on the property. 

You can still get a good "deal" on a foreclosed home in Trinity, New Port Richey or Hudson Florida but if you want to go that route and get a home for a low price in our area  I will tell you that the homes will need work, have been neglected and if it's too cheap to be true it probably is. Please contact me if you think you need to short sale your home. I have the experience and network of professionals to assist you and successfully sell your home as a short sale.