Real Estate - Can we talk short-sales?

[SvilleKid]

Originally Posted by wayner123

1. Just because a house says it's a short sale doesn't mean it truly is one. A lot of times (at least around here in Central FL) the house is upside down. So the real estate agent knows that the asking price will have to be below what the owner owes. So they list it as a short sale. They usually wait until they have an offer, THEN they go to the bank which holds the loan/title and go from there. So it can take 6-12 months before you actually hear whether or not your offer was accepted. Mortgage companies are so swamped with requests that it seems to take forever. If the house you are looking at already has done the correct short sale papers, ask to see them. Just because the house is listed at $XXX,XXX doesn't mean the bank who holds the loan approved that amount.

He got close to what I think is THE most important issue: MARKET VALUE!

Just because a short-sale price is put out there, it doesn't mean that the short sale price is below market value. Get you own appraisal. Make sure the appraiser considers the marketing time and value trends of the subject's immediate and general market. If it is a short sale, IT IS UPSIDE DOWN. Otherwise it wouldn't be short. It is in the bank's best interest (and maybe the homeowners too, if they are on the line for the deficiency), to get as much of the loan back if possible. Thus, they might be asking a price that is above the market value. In an economy where property is still depreciating or static at best, you cannot afford to pay more than value. Without appreciation in value, it will take a long time to get back equity if you enter the sale upside down yourself.