SHORT SALE question
 

So I was reading about short sales and the common thought was: "If you can get the house at 50% less it is a steal. 30% less is common for a short sale, if you can't get it for that move on to the next one."

Well, they don't mention if that discount is relative to what the house is currently worth or what is owed on the mortgage. Who knows?

I think it varies, but usually i think you will get a deal on em. Short sales are just so the banks can get the houses off their hands. I think a lot of them are willing to take a small loss on it doing a short sale than being stuck with it for a long term.

http://en.wikipedia.org/wiki/Short_sale_(real_estate)

"A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. 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."

Short sales are very hit or miss, as are foreclosures.

My other business is REO -- my people list and sell foreclosures on behalf of the banks.

I've had listings come through that I think are a steal and many more that are way overpriced.

You just have to be careful. Very careful.

If you don't know that much, you need to get into some research for awhile before you play with anything. It's fairly obvious that in that scenario what is owed on the note is COMPLETELY IRRELEVANT and the current value is the determining factor when making your decision to be involved in a deal.

And if some expert comes on and tells you that so long as you get X% off of the note, it's a deal, tell them to go fuck some nails.

I've seen realtors say it's a short sale when it's not.

Seems like the hip thing to say if you're selling a house.

You are still paying what the house is worth, so its not like you are getting much of a "deal". It means the previous owner owes more than they can sell it for. You are not really getting a "deal" unless you plan to keep the property for a long ass time.


Short sale means the seller is motivated, but they are already loosing so you shouldnt look to low ball much more, the bank has to accept your offer, not the seller.

These guys doing this are out looking for people who actually have some equity but are priced out of their home... basically you get them moved ( a couple gs or so ) and in some cases you can just walk in and take over their note, I think.

I sale short ICQ?

I'm actually helping a friend try and close one of these currently, so I'll give you my feedback working these in the Tampa Bay area.

Some things may vary state to state, but from what I've seen, the short sales aren't priced exceedingly below market, as there are many home owners nearing foreclosure that are willing to sell outright for less and take a loss to avoid bankruptcy.

If you find a home you like that is in the short sale process you can place an offer, think of your offer more like a bid on the home and the listing price like a suggestion, sometimes the banks want more then the ask. The accepted offer must be approved by not only whe home owner, but also the bank and an additional 3rd party, which I think might be an independant mediator. It's a bit of a drawn out process and from what the agents are saying you're looking at 60 to 90 days average for this process to run it's course.

Now, occasionally you can find a home where an offer was previously approved but the sale did not go through, so say the buyer's financing fell through or the parties couldn't reach an agreement post inspection. If you find one of these if you place a duplicate offer you can close on these with close to a 30 day time line as you would expect with a normal purchase.

I'm not sure if it's just because the housing market here is a little more depressed, but the short sales in my area don't always beat what's out there w/o all the baggage. So far it's been alot of hurry up and wait. The house is nice and my friend has the time, so I hope it works out for her. She put in the offer slightly above listing price hoping it would speed the process along but so far no luck with that, the bank is still evaluating the offer.

I think people confuse the definition of short sale. A short sale is technically merely selling a prop for less than what is owed on the mortgage and the bank writing off the diff as a loss vs. trying to collect it. The only reason I see that a short sale would go less than market value is if a QUICK sale was needed, which I suppose may be the case with a higher percentage of short sales than regular sales which is probably why they convey the notion of a lesser price (I know appraisers with choosing comps tend to take short sales with a grain of salt compared to normal sales if enough normal sale comps are available). Foreclosure sales would IMO be where there'd be lower prices...unless I'm mistaken, short sales are done in conjunction with the borrower pre-foreclosure to prevent foreclosure. The lesser price would come in the quickness needed in the sale whereas with a foreclosure sale, the bank wants the money and just doesn't want to have to deal with the property so I could see higher concessions in that case.

Been a while since I was in real estate appraisals so I may be a bit off in those sentiments, but to my knowledge, the only thing that should lower the sales price of a property below what it's worth is if a sale is needed faster than the avg. market time in the area or perhaps in times of a slow market like now where sellers might concede a bit on the sales price to ensure the property sells at all vs. the listing just sitting there forever with little solid interest. That's taking into account that things like condition, amenities etc. that always affect value of the propery would be included on an appraisal and taken into account with evaluating the property, i.e. a property with less amenities than the comp sales in the area should naturally have an adjustment in its value/sales price for that.