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What is a "Short Sale"…..?
We looked at property in Florida….but have to sell our home in NY first.
While we were looking, a RE sales person asked if we were interested in a "Short Sale".
Another RE sales person told us to stay away from them with a nine-foot poll.
What is the inside scoop?
A short sale means the seller’s lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.
Be aware that the seller need not be in default — to have stopped making mortgage payments — before a lender will consider a short sale. A lender may consider a short sale if the seller is current but the value has fallen. The seller may have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.
Buyers pursue short sales to get a good deal. So when you see a price listed for a home that you think is too low for the neighborhood, before you jump on that price like hot fudge on a sundae, ask your agent to call the listing agent to find out if the home is a short sale.
Because you might want to think twice about making an offer on a pre-foreclosure, short sale home. It’s not as simple as you may believe, and very few can close in 30 days or less.
The article goes on to day that even though lenders have agreed to a "short sale", there is *nothing* to prevent them from coming after the homeowner for the remainder of what’s owed. Sure doesn’t sound like something I’d want to get into.
Posted by MovingJacksonville.com
3 Responses to What is a "Short Sale"…..?
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I think a short sale in real estate refers to selling your existing, current home for less than you owe on it in order to make it more attractive, price wise, to buyers. The balance of the owed principle is then added to the new home’s mortgage. A really bad idea. Trust the RE person who warned against this practice. Sort of like trading in your car for a new one and the dealer adds what you still owe to the loan of the new one. Sounds great at first until a couple years pass and you owe way more than its worth.
References :
A short sale means the seller’s lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.
Be aware that the seller need not be in default — to have stopped making mortgage payments — before a lender will consider a short sale. A lender may consider a short sale if the seller is current but the value has fallen. The seller may have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.
Buyers pursue short sales to get a good deal. So when you see a price listed for a home that you think is too low for the neighborhood, before you jump on that price like hot fudge on a sundae, ask your agent to call the listing agent to find out if the home is a short sale.
Because you might want to think twice about making an offer on a pre-foreclosure, short sale home. It’s not as simple as you may believe, and very few can close in 30 days or less.
The article goes on to day that even though lenders have agreed to a "short sale", there is *nothing* to prevent them from coming after the homeowner for the remainder of what’s owed. Sure doesn’t sound like something I’d want to get into.
References :
Article found on Google.
It means that rather than having the house go into foreclosure, the homeowner can do a "short sale" which is essentially selling the house for much less than the current mortgage and below market value. If you’re buying a house through a short sale, that would be very beneficial to you. If you’re the seller, you will lose money on the deal but you probably don’t have the money to pay for the house anyway so it’s a quicker way to get rid of the house rather than foreclosing on it.
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