Difference Between Preforeclosure And Short Sale?
I am wondering is there a difference between preforeclosures and short sales? What I mean is, if a house is about to be foreclosed upon and the buyer is willing to sell his property to me and I find a buyer to flip the contract to who will take over the current mortgage payments, is this the same thing as a short sale?
I am asking b/c I've read posts where people are saying the banks may not cooperate if they with a "flipped" contract and I'm wondering why if they will still be getting their regular monthly payments. Is this the exception vs. the norm?
Thanks,
Dee 
Dee, a "preforeclosure" sale occurs when a homeowner whose loan is foreclosed, but still owns the home sells the home prior to a forced, public foreclosure sale.
A "short sale" occurs when the foreclosing mortgagee(s) agrees to accept less (as payment in full) than they are contractually due.
Thanks for clearing that up. I acutally looked over it after I posted, but thanks for confirming.
So the main difference is that with pre-foreclosure you purchase from the homeowner and with short sale you purchase from the lender?
In a pre-foreclosure after getting permission from the homeowner to negotiate with the lender to purchase their home at a discount, wouldn't it then be called a short sale since you are bargaining with the lender now?
Sorry for the newbie questions. I'm still trying to get a good grasp of the concepts of these two types of investing. Is there anyway someone can post an example of a short sale and pre-foreclosure?
Thanks in advance for your replies.
"So the main difference is that with pre-foreclosure you purchase from the homeowner and with short sale you purchase from the lender?"
No. When you purchase property from a (former) mortgagee, that's considered to be an REO (real estate owned by bank) purchase.