What is a Short Sale?
Hello,
I’ve been eying this Downtown Tampa, FL 1 bedroom condo that is listed for $141,000 but it’s a short sale. What does short sale means and what are the pros & cons of buying a condo that is consider short sale?
Please help!
Signed Eager Buyer
short sale is when the owner owes more on the mortgage then the property is worth.
In this case the owner may owe 200k but the lender has agreed he can sell it for less
Only draw back for a buyer is the length of time for both the seller and lender to agree to your offer
A short sale means that the owner is selling the property for less than what he owes on it. For example, the owner may still owe $200,000 for the condo but he can’t afford to make the payments anymore, so he talks to his lender and the lender says "ok, if you can’t pay your payments anymore, we will agree to a short sale". So he goes and sells it for as much as he can get for it, then the realtor talks to the bank and says "we have a buyer for $141,000, will you accept this much" and then the bank either accepts it or rejects it.
Pros: You get a better deal.
Cons: none for you, just make sure the property is in good condition.
References :
short sale is when the owner owes more on the mortgage then the property is worth.
In this case the owner may owe 200k but the lender has agreed he can sell it for less
Only draw back for a buyer is the length of time for both the seller and lender to agree to your offer
References :
It is a sale of real estate whereby the sale proceeds fail to cover full payoff amount due on remaining Mortgage Loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Far better than a foreclosure write-off in the lenders eyes. Both parties MUST consent to the short sale process. Doing so allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency. In addition Tax implication for the borrower may likewise persist
See WikiPedia For additional Specifics (http://www.putjahmosthigh.com/CREDITREPORTFICOSCORE.htm)
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You can do this yourself, so PLEASE be aware of scams…
Lenders have been accused of engaging in fraud during the short sale process. Uncovered by Jeremy Brandt and reported initially by CNBC, the fraud involves lenders in second position demanding kick backs in the form of cash payments from the home buyer or real estate agent, and that are not disclosed anywhere on closing documents or HUD-1 statement. This is in violation of RESPA rules, which require disclosure of such payments. For Specifics Steps on How to Go about Initiating Short Sale See "How To Do A Short Sale" article & More importantly How to Craft your Affidavit Hardship Letter
References :
A short sale is very common these days. With the onslaught of defaulting mortgages and the decline in real estate values, nearly 4 out of 10 homeowners are upside down with their equity position. This means that they owe more than the house is worth. With that being said, they aren’t able to sell the property. Lenders are very aware of this rising epidemic. Short sales have now become common practice for a lender.
It means that they will evaluate the property, as well as the financial circumstance of the seller, and determine whether or not they should take less than what is owed on the property. The pros? Well, you get a nice property for a nice price. Short sales normally sell for less than fair market value. the cons? The waiting time!! It could take anywhere from 5 months up to a year to get a short sale approved with the lender. Be sure that you’re in love with the property before you submit your offer to purchase, and be ready to ride it out during the "short sale" process.
Good LUck
References :
http://webuyinjax.com