Foreclosures
Foreclosures are commonly associated with short sales in that both relate to distressed properties, both involve banks, and both can often be purchased for deals.
Short sales are essentially properties for sale that are trying to avoid foreclosure. Foreclosures are very costly and time consuming for banks. In addition, once the foreclosure auction has actually happened, if the property isn’t purchased, then the bank owns the property. Banks aren’t designed to be in the business of owning real estate.
In many instances it is in the best interest of both the bank, and the homeowner to forgive a portion of the debt so that the home can sell before a foreclosure actually occurs.
When purchasing distressed properties, it is actually easier to purchase foreclosures than short sales. By the time the bank owns homes, the purchase process is usually rather simple and isn’t much different than purchasing traditional real estate.
Shopping for Foreclosures for sale is also most easily done by searching homes for sale on the MLS.
Foreclosure Homes that aren’t necessarily for sale, including potential future short sales can be found on websites like RealtyTrac.com. Realty trac takes data from the public records about notices of defaults and foreclosure options and displays them at a pay for view service. You can try this service free for one week.