Mihaela "Ela" Nistor

A short sale occurs when property is sold for less than the amount of money owed on the property.

In a short sale, the lender agrees to reduce a loan balance due to an economic or financial hardship on the part of the owner. This negotiation is all done through communication with a bank's loss mitigation department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

A short sale typically is executed to prevent a home foreclosure. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure.

  • Negotiations

Lenders have a varying tolerance for short sales and mitigated losses. The majority of lenders have a pre-determined criteria for such transactions. Other distressed lenders may allow any reasonable offer subject to a loss mitigator's approval. Multiple levels of approvals and conditions are very common with short sales. The wide array of parties, parameters and processes involved in a short sale makes it a relatively complex and highly specialized type of real estate transaction which is why unfortunately short sale deals have a high failure rate and often do not close on time to save homeowners from foreclosure when they are not handled by a knowledgeable and experienced professional.

One thing a buyer should know about a short sale is there is no necessary commitment by the bank to sell the house.

Any short sale contract includes a contingency where the bank must approve the sale. If the bank persuades the seller to refinance the house, the bank doesn't approve the short sale and the buyer gets their deposit back. In this situation the bank has tied up several months of the buyers time and now the buyer must start the buying process over again. So if you have a fixed time period to get in a specific city or neighborhood you may be better off with a foreclosure (the bank formally took possession of the property) or a situation where the seller has equity.

  • Credit Reporting

A short sale does adversely affect a person's credit report, though the negative impact is typically less than a foreclosure.  Depending upon other credit information it is typically possible to obtain another mortgage 1-3 years after a short sale.


If you have any questions, please do not hesitate to contact me via e-mail: or by phone: 773. 653. 6442



A foreclosure is a forced sale of the property at public auction to repay a mortgage debt.

In Illinois the foreclosure proceedings are judicial. The lender obtains the right to foreclosure by filling and winning a lawsuit.The most common cause of Foreclosure these days is non-payment of the mortgage by the home owner. Below are the steps in the Foreclosure Process:

  1. Pre-foreclosure:
    • Pre-Lien 30 days- during this period the homeowner is initially notified by a phone call of a mortgage payment default.
    • Lien 30 days- the lender will place a lien on the property. A lien is a legal claim against a property; when the property is sold the lien-holder is paid. 
    • Notice of Default (NOD) 90 days- the lender will send a formal NOD to borrower with a specific redemption period within which the property can be reclaimed by paying the past due amounts. 
  2. Auction:  
  • Notice of Sale- is given within 21-25 days
  • Trustee Sale- is a public auction that is open to all bidders and the property is usually awarded to the highest bidder who meets all the criteria set by the Trustee. 


  1. Real Estate Owned (REO) Property- if a property doesn’t sell at Auction it becomes an REO which is real estate owned by the lender as the result of default by borrower. The lending institutions do not want to carry inventory of real property and therefore may be very motivated to sell.

 REO foreclosures are perhaps the easiest method of purchasing distressed property. The risk is less than at Auctions because the property can be investigated prior the sale. In addition, expenses such as taxes and liens, not covered in the sale of an Auction property, may be covered by the lending institution.


To buy an REO property and find more information about foreclosure process, please contact me by phone at: 773. 653. 6442 or by e-mail:







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