Band owned and short sales
WHAT IS A FORECLOSURE? WHAT IS A SHORT SALE?
There are many questions we hear about Foreclosures and Shortsales. We will start with foreclosures, which is a home that is owned by a bank or private institution. The foreclosure process was completed and the bank puts the home on the open market for the consumer to bid on and purchase. You may or may not get a good deal when you purchase a foreclosure home. Most foreclosures need work and the transfer taxes that a seller would normally be responsible to pay, are paid by the buyer.
Shortsales occur when a seller is behind on their loan, puts the home on the market and does not have enough equity in the home to pay the entire loan owed to their bank. When the seller obtains a buyer, the process is a bit different in NY. Normally in NY, an offer to purchase is presented, signed by the seller and the buyer and the contract is prepared and signed thereafter. With a shortsale, even though the home still belongs to the seller, not the bank, the bank has to approve the contract and the purchase price that buyer offered and seller agreed to. The bank has to agree that seller will “sell short” of what the seller owes the bank. The buyer is not responsible for the transfer taxes. There are some issues that arise with short sale purchases.
For more detailed explanations and further questions on Foreclosures and Short Sales, feel free to call at any time.