Short Sales, Deed in Lieu of Foreclosure, Foreclosure: What are the differences and what does it all mean?
Recently lowered interest rates and cheaper prices on homes have prompted many buyers, and notably prospective first time homebuyers, to come off of the sidelines and make offers on home purchases. One area getting a great deal of attention, and requests for advice from real estate brokers, involves opportunities presented by short sales and bank owned property. Banks typically come to own residential real estate either through the foreclosure process or a process known as deed in lieu of foreclosure. In the case of short sales, owners are attempting to work with their lender to sell their home for a mutually agreeable sales price that is less than the amount of the mortgage debt. Given the number of inquiries I've received from buyers (and sellers) on these topics, I am taking the opportunity to post to my Hot Topics page a link to the descriptive article Short Sales and Deeds in Lieu of Foreclosure (click here).
Depending on whether or not your interest is based on buying or selling, you will find numerous helpful references under Related Articles. As you will read, short sales and deed in lieu of foreclosure may provide options for sellers to prevent the credit impairment and stigma associated with foreclosure. On the other hand, an educated buyer may be able to approach a short sale as an opportunity to buy a home at a meaningful discount, an opportunity made all the more attractive by the low interest rates once again available.