Short Sale Vs. Deed In Lieu?
Are there any advantages for a seller that does a short sale instead of a Deed in Lieu of Forclosure?
Are there any advantages for a seller that does a short sale instead of a Deed in Lieu of Forclosure?
if i understand correctly, a seller cant do a ss himself.. that requires a separate entity with intent to purchase..the lending institution may stipulate that no procedes from sale are to go to seller/owner..
ARCHFEET,
A deed in leiu of foreclosure is when the owner hands the keys and deed back to the bank because he cannot pay back the mortgage amount owed on the home.
A short sale is when the lender agrees to allow a buyer purchase the property for less than what is owed on the mortgage. You can ask the lender not to pursue a deficiency judgement against the seller - meaning the lender will not pursue the difference between the amount owed and the short sale amount from the seller later.
I honestly do not know which one would be the best alternative, but either way is better than having the foreclosure on your credit for 7 years once it goes to the auction.
Tanya
tanya,
when performing a short sale, does the buyer have to ask for the bank not to go after the seller for the difference, or is it understood that they won't.
Is this somethign that needs to be put into contracts or brought up ahead of time with the sellers?
You usually have to ask the lender if they will waive any deficiency judgements against the seller. Or you can put a clause in the sales contract that states the lender will waive any deficiency judgements against the seller. You can have a real estate attorney help you with putting it in the contract or addendum, if necessary.
Tanya