Foreclosure Short Sales Explained

Foreclosure short sales can allow a debtor facing foreclosure to avoid the eventual repossession and auction of the property. Short sales take place in what is commonly known as the pre foreclosure period, meaning that the debtor has not yet lost ownership of the home. Short sales foreclosures means the bank agrees to take less money then they are owed. This benefits the lender because they are getting a lump-sum up-front payment. This also benefits anyone involved in short sale investing, because they can buy cheap real estate at huge discounts.

Profiting with a Short Sale Foreclosure

When a debtor is facing foreclosure, the lender's number one concern is to recover the balance due on the mortgage loan. In a short sale foreclosure example, a debtor may owe $250,000 on the mortgage. The foreclosure investor may offer to buy the property for $200,000. The investor instantly saves $50,000. The lender recovers most of its principal, and the homeowner gets to avoid the unpleasant outcome of the foreclosure process. Use our listings, tips and tools to learn how you can get great deals on pre foreclosure short sales.