Foreclosures & Short Sales: What’s the Difference?

short sale vs foreclosure whats the difference

In 2007, America was in a real estate bubble. The majority of Americans, especially first-time homebuyers thought that they were getting great deals on homes, while investors raked in as many properties as they could. It was only a matter of a few short years before the recession began and the housing market across the United States tanked! Banks were held accountable and quite a few people who bought real estate either had to foreclose or do a short sale to get out of their mortgage. Many struggled to keep their underwater investment properties. Foreclosures & short sales began to quickly be the easy way out of their mortgages.

Foreclosures & Short Sales

We’ve learned so much since then, but yet, sometimes properties have a selling price that seems too good to pass up. Becoming educated and gaining an understanding of how the process works for each of these situations can help you navigate through the process of a foreclosure or short sale. We will provide the understanding between foreclosures & short sales in our monthly post.

short sale

What is a Short Sale?

We bet that at least once someone has told you to stay away from short sales. If not, you’ve perhaps heard they are a great deal! Regardless, the result is this: Purchasing a short sale is a complicated process. In fact, very few short sales are completed within 30 to 120 days. Knowing whether it’s worth all of the extra work depends on the buyer’s situation.

A short sale may be the sale of property for which the lending company is willing to accept significantly less than the amount owed on the loan. For a sale to be a short sale, both of these things must be true:

The owner must be very behind on payments that they can’t catch up.

Usually, the housing market has gone down so much that house is worth far less than the rest of the balance on the mortgage.

In most cases, the lending company (and the homeowner) will attempt a short sale process to avoid a foreclosure. In general, there are a great number of misunderstandings around short sales. One misconception is that lenders only desire to get rid of the property and will move quickly to sell it far below the price of what it is worth. Actuality, the lender will take their time to recover their loss because they can. Keep in mind: Just because a house or property is listed as a short sale certainly does not mean the lender must accept your low offer! This is even if the owner accepts it and is exactly the reason why a short sale can be so tricky.

house foreclosure

What’s a Foreclosure?

Foreclosure is what happens whenever a homeowner does not pay the mortgage. It is a legal process where the owner forfeits all rights of the house. If the owner can’t pay back the outstanding debt or sell the house via short sale, the property then auctioned as a foreclosure. If it doesn’t sell there, the lender takes possession of the house.


#1: Missing Payments

Everything begins when the homeowner, also known as the borrower, does not make mortgage payments on time. Generally, it’s because they can’t, because of hardships, for example, unemployment, divorce, death or medical challenges.

If you’re in this difficult situation, it is necessary that you speak to your lender as quickly as possible. There are quite a few options and compromises to keep you in your home. The foreclosure process costs most lenders a ton of money and resources. They would rather work something out and avoid this process just as much as you do.

Sometimes, a borrower might intentionally stop paying the loan because the property may be underwater. In simple terms, the amount of the mortgage exceeds the property value.

Whatever the reason, the end result is that the borrower cannot meet the terms of the loan.

#2: Public notice

After a number of missed payments, the lending company records a public notice with the County Recorder’s Office. They will indicate that the borrower has defaulted on their house mortgage. In a few states, it is called a Notice of Default (NOD); in others, it’s a lis pendens – Latin for “suit pending.”

Depending on your state’s law, the lending company may be required to post the notice on the front door of the house. This official notice makes the borrowers aware that they are at the risk of a pending foreclosure to the property.  It also shows them they may end up being evicted from the premises.

#3: Pre-Foreclosure

After receiving a  Notice of Default (NOD) from the lender, the debtor enters a grace period also known as pre-foreclosure. During this time period (from 30 to 120 days, based on local regulations) the borrower may work out an arrangement with the lender with a short sale or payment of the amount owed.

If the borrower takes care of the default during this period, foreclosure ends. The borrower will avoid home eviction and the sale. If the default isn’t paid off and the foreclosure will continue.

#4: Foreclosures Auction

If the default isn’t remedied by the deadline, the lending company sets a date for the property to be sold at a foreclosure auction. The Notice of Trustee’s Sale (NTS) is documented with the County Recorder’s Office. They also send notifications to the borrower and post on the property and publish in the newspaper. Auctions can be held on the county courthouse, in the trustee’s office, at a convention center, and even at the property’s address.

At the auction, the house is sold to the highest bidder for cash. As the pool of potential buyers who are able to afford and pay cash for a house is limited, many lenders make a contract with the borrower to take the property back.

#5: Post-foreclosure

If a third party will not purchase the property or home at the foreclosure auction, the lender company takes ownership of it. It is what is known as a bank-owned property.

Bank repossessed properties are sold in two ways. Frequently, they are listed and sold by a local real estate agent. The MLS system and lists bank-owned properties. Some lenders prefer to list them themselves, also known as Real Estate Owned (REO). These are called a bank-owned liquidation auction and are frequent so they can get rid of them as soon as possible.

local Foreclosures & Short Sales Houses

Short Sales vs. Foreclosures

In conclusion, having neither foreclosures & short sales on their hands is very good. They are not an easy way to avoid paying your house debt. It is the worst case for a seller who would like to get rid of their house mortgage and start fresh.

Short Sale

If a short sale has to take place, the home should be worth far less than the total amount the homeowners owe. They must be behind on payments to the mortgage and believe that they cannot catch up. Potential buyers will deal with sellers / real estate agent during the short sale process. Each of the details around the short sale process must be reviewed and approved by the lending company. Short sales cannot happen unless the lender checks off on the sale. Everything would depend on the lending company. The process can be lengthy and unpredictable even if the homeowner agrees to sell to a potential buyer and their terms.

Foreclosure Report


In a foreclosure situation, the bank or lender takes ownership after the buyer is unable to make payments. This method is initiated by the lender. The bank will force the sale of the home in order to recover the original loan amount. If the homeowners are living in the house, they will be evicted during the foreclosure process. The loan provider will then attempt to sell the house either an auction or through a real estate broker. The foreclosure process normally takes less time compared to a short sale. Most lenders need to liquidate the home as quickly as possible.

Which Is Better Between Foreclosures & Short Sales?

For homeowners, a short sale is typically better than a foreclosure because of two reasons. First, a short sale can be voluntary while a foreclosure is forced. Second, after a foreclosure or short sale, many people are required to wait seven years before obtaining another home mortgage. Most lenders would prefer a short sale to foreclosure because it enables them to recoup a majority of the initial loan. This can be done without a long and costly legal process. Generally, in most cases, homeowners and lenders will pursue a foreclosure after an effort to sell the property through a short sale process.

For more details or questions about foreclosures & short sales reach out to one of our agents. Contact us below or call (850) 792-4464. If you would like to search for foreclosures & short sales in your area click here.


Declutter Your Home, to Get Organized!

get organized kitchen

New Year’s is certainly a time to look back to the past, and more importantly, forward to the year ahead. This year we have accomplished so much, nonetheless, it is a time to think about the changes we want (or need) to resolve. Our New Year’s resolution this year is to help our readers to declutter your home! The faster you start on it the faster you can check it off your list. Please understand that it is always a work in progress and we are still working on ours even through the holidays. Once done you will be happy with the outcome and what you achieved. Every Realtor sees the investment in getting organized and decluttered. We always recommend getting organized before moving and putting your house up for sale. Please join us reading how to declutter your home, and you can thank us later.

Get Rid of “Things” & Get Organized

First and foremost, we are “moderate minimalists”… not. If you’ve been in your home for a good amount of time, it’s likely that you have collected a lot of stuff over time.  Beginning this process is the first step. Living this way doesn’t exactly come very easily, but we are happy to be learning and growing. It is an amazing journey to get things organized and put away. We began with a game plan to use the facebook marketplace to get rid of big items that were in great condition. The outcome was better than we could ever expect and we got rid of so much! We always kept in mind, the less you have, the better it’ll fit into your house. Also, the less organizing you will need to do once you move to a new house. We are sure there are other creative ways to declutter your home but getting rid of things is the easiest.

declutter your home

These Are Our Personal Recommendations for Things in the House:

Every single item needs it’s own spot to be placed away. Think out of sight out of mind. Make a space for everything and everything must be put into its place. Bills, bags, books, keys, wallets etc. – each item needs its very own spot. If there is not a spot for something on a shelf, drawer or a basket, it will never be put away! It will become left to sit and gather dust. If you have a family always on the go, you understand! Our dream is to get organized to the point where we have no junk drawers

Do Not Own More Than One of Something.

We are aware this doesn’t always work with everything or everyone. Everyone must be on the same page if you want to declutter your home. For example, the man of the house likes to fix and woodwork and has a few toolsets. He uses them all. On the other hand, we have a few cans of paint sitting in the garage for touch ups and projects. We got rid of a few old cans to a local Tallahassee charity. But when getting rid of the extras, we agreed we didn’t need two leaf blowers or three knife sets. Ditch the extras to a local charity or Goodwill. If you have enough items they may come and pick them up free of charge, plus there is a tax write-off.

If You Don’t Use It, Lose It.

Some items may be difficult to part with. Sentimental value items are always the hardest to get rid of. Only you understand the value and story behind it. If it’s worthwhile to hold onto keeping it, but if it’s weighing you down or gathering dust, consider offering it to someone to hold onto it.

organized kitchen silverware

When Shopping Ask Yourself… 

Below are a few questions to consider when you’re purchasing – and the same applies to donations or garage sale treasures. Because it’s free doesn’t signify it belongs in your space. Is it something I’ll use regularly? “Do I actually juice on a weekly basis, with this juicer my dad got me for Christmas?” Or will it just take up space on my counter?

Do I Currently Have A Similar Item? If So, You Don’t Need It!

Why do we all have a tendency to buy several similar clothing items again and again? If you have one or two cute black dresses, that is all you probably need. Time to declutter your home.

Where does it go when we get home? If we cannot think of a place it should go or its own spot, out of sight, then we will not purchase it. It will add clutter and you should get it under control asap.

clean organized kitchen

How to Get Your Kitchen Organized & Declutter Your Home

  • Toss chipped and broken items, they are dangerous.
  • No need taking up prime cabinet space for items to get off the counter.
  • Limit the number of reusable water bottles and on-the-go coffee mugs. We now have 4 of each.
  • Split up utensils used for cooking on the stove and devices into two drawers.
  • Clean off the counter from anything that fit into drawers. Furthermore, Use drawer dividers.
  • Throw away mismatched and stained Tupperware containers. Buy new, smaller glass sets (they cost more but last longer).
  • Get rid of old spices.
  • If there is still not enough space for your kitchen items, more must go.
  • Create a good space for each appliance, pan, etc to be put.
  • Eliminate the random dishes that don’t belong to a set.

clean bed room high end

In Conclusion to Declutter Your Home

Here are the positives we are seeing from decluttering:

  • Less mess to deal with and clean up.
  • Saves money and time, not searching for and buying unneeded things.
  • Makes life simpler when we need to look for things such as house keys.
  • Helps us use the space to its full potential.
  • Our spaces feel calmer in a clutter-free house. It looks better too.

The house still gets messy and dishes still seem to accumulate around the sink but knowing that things have a place is reassuring. If a room needs to be organized, it requires half the time to get in order. It’s not as overwhelming now. We have determined to not let clutter be the center of our lives anymore. All it does is consume time, focus, and space. Declutter your home and you will get back your happiness!

Keep It Up and Get Organized. We believe in You!

It takes time to go through any space and trim out the clutter, and trust us it’s a never-ending task. Stuff will usually find its way into your home! Take time to keep track and getting rid of what you’re accumulating. All you have to do is begin and in no time you will live in a clutter-free home. If you are getting ready to sell your home or move to a new one this will help you declutter your home in preparation. Give us a call or send us a message below if you have any questions.


Selling Your Home in Tallahassee During the Holidays? Considering Decorating it Right!

selling your home in tallahassee florida Realtor

Selling your home in Tallahassee during the holidays means you might need a crash course on how to decorate your home for the holiday season without turning off buyers.

Think Cheerful & Inviting When Guests Are Over

Unless you’re a complete Scrooge, it’s hard to argue with glitter lights, large tree, and colorful statues of old Saint Nick. These all make the home look more cheerful and inviting when guests are over. But you also probably know that if you’re trying to sell your home, buyers need to have an easy time imagining themselves in your home. Their seasonal traditions are not like yours so we may need to take them down a notch.

saint nick beard christmas tips to sell your house

You don’t need to ditch the decorations altogether. Nevertheless, you should not go crazy hanging wreaths, holly, and Christmas lights. Every holiday card you receive from your family should not be the focal point, either. So how do you let the holiday spirit flow without turning off a potential buyer? We have some tips for you! Grab your favorite holiday drink and cozy up with your favorite blanket to read our real estate guide on selling your home in Tallahassee!

1. Depersonalize the Decorations

It is important the look of your rooms appeals to as many different real estate buyers as possible! Everyone has a different taste or opinion and during the holidays, it can be even more direct. The seller’s personal life shouldn’t be prominently highlighted throughout the residence. Less is more when it comes to decorations while selling your home in Tallahassee.

selling a house get rid of christmas cards
That means avoiding the personal decorations that appeal to you and your family:

• “Best Football Mom” ornament you received at football camp
• 10 Christmas stockings of everyone that comes over during Christmas morning
• Religious nativity scenes
• A ton of holiday cards, try to limit to no more than 3
• Photos of your baby’s first Christmas

2. Consider the Neighborhood While Selling Your Home in Tallahassee

If all of your neighbors get in the nature of the holidays, you don’t want to look like a Grinch. If your neighborhood is going all out with holiday lights and nativity scenes, then, by all means, add to it a little. Then when people look at the lights, it is also free real estate marketing. Check out these neighborhoods for inspiration: Killearn, Dorothy B. Oven Park, and Chain of Parks – Park Avenue.

killarney way park in tallahassee

If your local neighborhood is festive, then a buyer would expect Christmas decorations at your home. Selling your home in Tallahassee is not a science. Under other conditions, if you live in a conservative community with a mix of religious and spiritual beliefs, add a little. Use decorations in a way to promote season’s greetings rather than your specific holiday.

tallahassee condo for sale3. In the Event that you Must Add some Holiday Decorations.

Here is How:

• Keep it classic and basic: Hang up a stylish custom wreath on the front door, rather than a “Santa is coming to town!” Keep it stylish but do not go overboard. Think classic and elegant.

• Celebrate the holidays with color: Some can agree religious symbols are iffy, nevertheless, you don’t have to forsake them altogether. If you celebrate Hanukkah, hang a wreath with tones of blue. For Christmas, your wreath can be created with evergreen boughs and pine cones. For Kwanzaa, add red bows on a green wreath.

• Don’t Overdo Lights: Simple white or blue lighting can add a holiday cheer without blinding buyers during showings. Also, turning off the blinking or pulsing will keep it classic without looking like a disco club.

selling your house during the holidays

• Protect Presents: Don’t stack presents under a tree or put them on display. The last thing you want this holiday is for a stranger knock them over. Get them out of the way of guests.

• Choose Scents Over Scenes: The smell of simmering wintergreen essential oil or baked cookies will delight the senses. These can be better than garlands strung all over the house. Furthermore, providing fresh baked cookies to the guests will wow them during a long day of looking at houses in Tallahassee.

• Light the Fireplace: A roaring fire during a cool weekday shows a cozy way to celebrate the winter and warm guests as well. Who doesn’t like the smell of a crackling fire? This also highlights a feature that not many Florida homes have.

light the fireplace during the holidays open house

• Box Up the Greeting Cards: We cannot speak enough on cards! We see them everywhere when others are selling homes in Tallahassee. Thirty holiday cards on a dining room table make the room look messy. Put them in a drawer during a Realtor walk through.

• Increase Highlights of Guest Bathrooms: Place peppermint-scented soaps or Cedar candles in the bathrooms along with a few tasteful, holiday-themed towels. They show off the highlights of the bathroom and add some spirit and interest.

Selling Real Estate During the Holidays is a Great Idea

Lastly, homeowners may believe the market to slow during the holidays but remember that a lot of folks have a considerable amount of time off work. They have the extra time to look around town for properties. Also, many sellers don’t want to be bothered by showings during the holidays. This means less competition of similar homes available for the motivated buyers. In our opinion, it is the perfect time for buyers and sellers in the housing market.

During this festive time, selling your home in Tallahassee is easy with our tips! You will have fewer house hunters, but more motivated buyers. Give Eldridge Home Team a call (850) 792-4464 if you have any questions. Contact us below and we can discuss selling your house over some hot chocolate.