Recent activity on homes in Hilton Head have involved many short sales. For those of you who may be a little confused about the difference between a short sale and a foreclosure, let me take a minute to explain exactly what a short sale involves. A short sale is described as a situation where the sale proceeds on a home falls short of what the borrower owes on the property's loan. It often occurs when a borrower cannot pay the mortgage loan, but the lender decides that it is better to sell the property at a loss than pressing the borrower to pay. Both parties consent to a short sale process because it allows for them to avoid foreclosure as it involves hefty fees for the lender and poorer credit reports for the borrower.

In a short sale, the lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The homeowner sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Short sales are different from foreclosures in that a foreclosure is forced by a lender, whereas both lender and borrower consent to a short sale.

Short sales are often timely to negotiate and the buyer may have to wait months to receive response from the lender. The good news is that typically, properties being sold in a short sale situation can be great buys.

The best advice we can give a buyer or a seller, is that, in order to make the process move quickly, work with a realtor who specializes in the process. Foundation Realty prides itself in expediting the process, by working closely with lenders, attorneys, homeowners and buyers. There isn't a better time than now to take advantage of some great real estate opportunities on our beautiful Island..