Just Need A Definition

Comments(6)

• 
  d_random20th May, 2005

  Short Sale
  A short sale is really a form of pre-foreclosure sale and occurs when the mortgagee agrees to accept less than the loan amount to avoid foreclosure. A negotiated short sale results in a discounted purchase price for the buyer. The buyer would finance the acquisition much the same as in any conventional realty acquisition... but without the luxury of time.
  
  due-on-sale clause
  Standard language in a mortgage which states that the loan must be paid when a house is sold.
  
  subject-to
  The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.
  
  Hope this helps.

• 
  LovnJustn921st May, 2005

  Thanks so much. I guess the only thing that I dont quite understand is the short sale topic. So as an investor, how do I come across short sales? Do i find them through the banks? and once I find them the concept is that basically, the bank will accept a smaller amount so they dont have to deal with the foreclosure? and who eats the rest of the difference? the bank?

• 
  MissHelen22nd May, 2005

  They can be found by finding folks in foreclosure or almost in foreclosure. Be ready to make your offer and then sit and wait while the bank decides whether or not they should do this. They will probably send out an appraiser to get a value, and then they will decide. I just had a property listed. The woman is in foreclosure, we had a deal togehter and at the last minute discovered there were all sorts of liens for tax sale, water bills, a ton of repairs etc, the bank turned it down. We had an fha appraisal for $70,000 with $5000 in needed repairs. They think they can make more money by letting it become an reo property.
  They also said the repairs were the buyers problem, but fha does not allow the buyer to pay for the repairs.

• 
  LovnJustn922nd May, 2005

  thanks for the help. this makes much more sense!

• 
  cpifer20th May, 2005

  Not!

• 
  capitolinvestor20th May, 2005

  Could you clarify that?