Buying & Selling Short Sales and Foreclosures in Wisconsin
Short Sales vs. Foreclosures: What You Need to Know
Short sales and foreclosures are non-traditional home sales.
A short sale describes a sale in which there is more debt owed against the property than the property’s value. In this case, the property is commonly referred to as being “under water.”
Foreclosure is a legal process where a defaulted borrower is deprived of their interest in the mortgaged property.
- Search Wisconsin Short Sale and Foreclosure Listings
- Search National Short Sale and Foreclosure Listings
- Search Certified Short Sale and Foreclosure Agents
Benefits of a short sale compared with a foreclosure:
- A short sale may not damage the owner’s credit report and/or ability to obtain financing in the future as much as a foreclosure.
- Short sales lessen the impact a foreclosure can have on the surrounding community.
- Once a short sale is processed, the term “short sale” or “short sell” does not appear on the credit report, whereas a foreclosure remains on the credit history for seven years. (Note: the status of the homeowner’s account with the lender — which is negotiable — does appear and may impact the seller’s credit score).
- If a prospective employer runs a credit check on you, your job application may be denied if you have a foreclosure on your record.
- The bank will often cover the agent commission for a “short sale” on a home sale.
- The seller can often continue living in the home until it is sold.
Tips for buyers and sellers when considering short sales:
Short sales for sellers:
- Consider loan modification first. If you’re considering selling your home because of difficulties making mortgage payments, contact your lender to see if there are any programs available that can help you keep your home.
Loan modification might include:
- Refinancing your loan at a lower interest rate
- Providing a different payment plan to help you catch up
- Providing a forbearance period if your situation is temporary
- Hardship situations might include catastrophic medical illness, job loss, job relocation, divorce, etc.
Short sales for buyers:
- Ask lots of questions about the home and its current financial status. When conducting a cost analysis, consider these key factors:
- Required repairs
- Unpaid bills on the home
- Property taxes
Get answers to some of the more frequently asked questions about the purchase of foreclosure properties.
Bank Owned Properties
In the case of Bank Owned, or REO (Real Estate Owned) properties, the property has been foreclosed and the bank is now the owner/seller. This occurs when a home isn’t bought at auction.
At this point, the bank wants to sell the property to obtain fair market value. However, the foreclosed home is often distressed and selling it at fair market value is unlikely. The benefits of purchasing REO is that it is a much faster process and there is more control over the buying process.
When entering into these types of real estate transactions, it’s vital to consult an expert who understands the market and can help you throughout the process. Shorewest offers the largest knowledge base and amount of expertise in short sales. Many agents have taken the Short Sales and Foreclosure Resource (SFR) certification course. Shorewest closing and title divisions are trained and versed in short sales and know how to streamline a sale to closing.