Short Sale SellersKnowing the Difference
Regular Sale – A sale where the seller has equity in the property. The buyer and seller will negotiate price and terms of the sale. The seller is required to provide Disclosures according to California Law and statute. The transactions in this type of sale are generally much easier to come together as there are time-lines in which the seller needs to follow in the transaction.
Short Sale – A short sale is the sale of the property is less than the loan(s) financed on the property. The seller’s lender is accepting less than what is owed and is usually purchased “as is” without repairs or warranties since the lender is taking a 30% to 50% loss on the property. This is why they will not negotiate on the price. In many areas, they are multiple offers on a home. If there is more than one loan on the property, all the lenders must approve for the contract to go through.
REO/Bank Owned – REO means real estate owned property that has been foreclosed on or repossessed by banks or lenders. The properties are sold “as is” without repairs or warranties. The lender is exampt by law from completing any disclosures. The process for bank approval can be anywhere from three to 10 days.
Pre-foreclosure Property -A property where the homeowner has fallen behind in their payments of when a NOD has been filed against the property. There properties may appear to be regular sales.