Short Sales and Foreclosures

A “short sale” is when the seller does not have enough funds to cover the mortgage liens on their property.  In most cases, the mortgage holders are willing to release the mortgage liens against the property to convey title to the new buyer free and clear.

If you are interested in taking advantage of the current housing market by purchasing a short sale or foreclosure, here are three important things you should know. 

First and foremost, not every buyer is positioned to purchase a short sale or foreclosure.  You must be able to purchase the property without a condition to sell your existing home.  Banks will not accept offers subject to the sale of another property.  Banks are looking for pre-approved buyers that have limited conditions to their purchase. 

Second, properties that are actually foreclosed are usually a mess - both literally and figuratively.  By the time a bank forecloses, it’s generally not the only creditor to whom the property owner owes money.  Some of these creditors (such as contractors) may have put liens on the property.  Also, the owner may have become discouraged and been either unwilling or unable to properly maintain the property.  Even worse, it’s not uncommon for owners in foreclosure to damage the property, sell all the appliances, remove light fixtures, smash windows or punch holes in the walls.