As our economy recovers and the market grows stronger, terms like “short sale” and “foreclosure” are used less frequently. Still, many aren’t sure what these terms mean, or aren’t sure what the difference is between the two.
A foreclosure occurs when the bank has taken back the property into its inventory. When a borrower falls behind on their mortgage, typically their lender will give them several opportunities to catch up. If they cannot, the bank will foreclose, take back the property, and resell. Georgia law requires a bank to advertise the sale for four weeks, and then hold a sale on the first Tuesday of each month at the courthouse. If the property doesn’t sell, the bank takes the property back into its inventory and hires a local real estate agent to list the home. Unlike the earlier courthouse sale, at this time potential buyers can have the property appraised and inspected before making an offer.
A short sale occurs when a borrower is behind on their mortgage and owes more than the property’s current value. With the bank’s blessing, the borrower sells the house for its value and the bank forgives the remaining balance on the loan. This is called a short sale, but it’s often a very long process, as the bank may take a while to approve the sale.
If you have any questions about foreclosures or short sales, contact us online at WoodallRealtyGroup.com, or call us at (706) 621-6085.