Preforclosures and Short sales differences

[Amadeus Hladun]

Hi, I was just wondering what the difference was between a preforclosure and a short sale and pros and cons for both?

Thanks!

[Account Closed]

@Amadeus Hladun I don't know what laws are up in Alberta. Here in Florida (and America for that matter) a Pre-Foreclosure means that the owners have missed payments to the bank. Once that happens a Lis Pendens is served. 

A Short Sale is when the owners (or really the bank) sell the house "short" of what they (the bank) are owed on the principal of the mortgage. This step of the foreclosure process happens before the home ever goes to auction. Sometimes, banks would rather just eat the loss and get the asset off their books as opposed to spending money on selling it as an REO. I have sold a bunch of distressed homes and currently buying a distressed 4plex.

If you have any other questions, feel free to PM me.