Q: Which is a more time consuming and difficult process, buying a Short Sale or a Foreclosure?
A: A Short Sale is generally much more time consuming and difficult.
Q: What is the difference between a Short Sale and Foreclosure?
A: With a Short Sale, a homeowner is asking the bank (his lender) to accept less than the amount due to pay off the loan as a part of the sale of the home. With a Foreclosure, a bank or other such lender owns the property and the previous owner is not a party to the transaction.
Q: What is the difference in expected time frames?
A: Jim Roy of LuxManor Real Estate has been involved with several Short Sales. Two of them involved situations where the bank took over 24 months to give a response. After two years, both responses came back as denials and the homes went to Foreclosure. Please note that Jim Roy is a Certified Distressed Property Expert. One of the banks was later outed as actually rewarding its employees for stringing along Short Sales for as long as possible and never getting them closed. Jim has been involved with Short Sales that did close and they took about 75 days following the date of contract ratification. 45 days would be considered quick but not impossible depending on the bank.
Foreclosures can be approved in a day and close a week later. A standard sale (neither a Short Sale nor a Foreclosure) takes about 7 to 30 days to close depending largely on the buyer’s lender or if the buyer is paying cash.
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