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Explaining Foreclosures, Short Sales, and Traditional Sales

Here’s how traditional sales, short sales, and foreclosures are different.

Today we’re going to talk about the difference between a traditional sale, a short sale, and a foreclosure.

  • A traditional sale is a transaction where the buyer and seller have no previous relationship.
  • A short sale is when the owner doesn’t have the equity in the home to pay off the mortgage. Contrary to how it sounds, it can be a very long process to get the banks to write off the missing amount or settle it with cash on hand. Some people say that a short sale is basically a pre-foreclosure because the owners tend to be behind on payments.
  • A foreclosure is when the bank files a motion to kick out the owners. In this case, the bank takes ownership of the property and turns around to sell it.

“A traditional sale is easily the smoothest since the process is much easier to follow.”

Short sales are the trickiest transaction in my opinion. With foreclosures, since the bank is the seller, they don’t have to talk with anyone else like the owner has to in a short sale. Short sales and foreclosures have more potential for liens which can delay the closing. A traditional sale is easily the smoothest since the process is much easier to follow.

At the end of the day, your situation and what you want to see in a property determine what we show you. If you have questions on the differences between these transactions or any other real estate questions, give us a call. We’d be happy to walk you through them.

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