Foreclosures, Short Sales and Trutee's Sales: What Does this All Mean!

If you have listened to the radio, watched TV, or read a newspaper in the last 12 months you have heard words such as foreclosure & short sales. I wanted to give you a quick definition of a foreclosure vs. short sale.

Foreclosure
This is the process used to enforce a payment or obligation on real property when a deed of trust (mortgage) is in default. These notices are usually filed after missing 3 or 4 payments.

Short Sale
A sale of a house in which the proceeds of the sale fall short of what the owner still owes on their mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive some of what is owed on a mortgage when the owner cannot make the mortgage payments.

Trustee’s Sale
When a homeowner is delinquent on their mortgage (typically 90 days past due or more) their underlying lender will attempt to foreclose on the property. This is done to protect the interest of the lender, and to attempt to recoup as much of the original investment (if not more) back to the lender and to their investors. A “Trustee” will prepare the Notice of Trustee’s Sale. This notice includes, among other information, a description of the property, an estimate of the amounts owed (the “opening bid”) and the time, date and place of the sale of the property. The Notice of Sale is then sent to a legal newspaper to publish the notice once each week for 3 consecutive weeks, the first publication to occur at least 21 days before the sale is conducted. A Notice is also posted on the property.

I know when you hear about purchasing foreclosed properties images of bidding on the court steps probably come to mind. Yes, that does happen at the end of the foreclosure process. However, what happens more frequently is that someone or some company will purchase homes at the court house and then sell the property or some properties will still be bank owned.

Some people commonly mistake a short sale for a foreclosed property when actually, a short sale happens before the Trustee Sale. A short sale can benefit the home owner from going to foreclosure. A foreclosure negatively impacts your credit for years. There are some credit ramifications associated with short sales as well, but once again, it will not impact a credit history as negatively as foreclosure will.

I hope this made this murky mess a bit clearer for you. Look soon for the following articles.

Short Sales for Buyers
Short Sales for Sellers
Homeowner’s: What You Should Know about Foreclosures

Welcome 2009

We couldn't be happier that 2009 is here. The New Year motivates us for change, and this year is no different. We are working really hard to provide you with updated, useful information so we can remain your real estate experts.

In the spirit of change, our office has moved. We are now located in Chesterfield Valley at 17050 Baxter Rd. This locations positions us just minutes from St. Charles County. It has great highway access so we have quick access to St. Louis and surrounding communities.

Our new office is in the MidWest Bank building on the corner of Chesterfield Airport and Baxter Roads. If you frequent Annie Gunns, you have driven past many times. Feel free to drop in and check out the new diggs.

Also, expect to see changes soon to our website incorporating Facebook, Linked In, and more.

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As always, we'd love to hear from you.

Julie