What is a short sell and are they still around
A short sell is just that, the owner is selling it short, based not on what the property is valued, it is based on what is owned on the property. For instance, if the owner owes $100,000 and someone offers $80,000, it is a short sell.
This became very popular, after the 08 crisis when people were upside down in their mortgage and needed to sell. The rule of thumb was that market value was a lot lower than the money owned on the house. Instead of chancing a foreclosure, they would short sell.
Basically, the only thing that happens is that the property is listed for less than what is owed. The potential buyer, makes an offer. The owner either excepts or rejects the offer. If they except, a contract is ratified between the buyer and the seller. At that point, the seller fills out paperwork with the bank than submits the offer to the bank. The bank needs to ratify the deal.
During the height of the crisis, many asked was it worth it. Too many folks were involved and too many times these deals fell through due to the time it took to close them. I, myself walked away from a short sell, due to these frustrations Back in the hay day, the question was why go through all the agony of a short sell. After all, the buyer was not buying the property at a discount, they were buying at market value.
Today is a little different. They buyer is getting a bargain. Prices are back up and folks are not up side down due to market conditions. If they are trying to short sell it has to do with property conditions, not market conditions. A particular property is not worth the market price because the property was not taken care of. and they are behind on mortgage payments and the owner is attempting to prevent a foreclosure. Bottom line, today short sells are bargains for investors. Just be prepared to do a little work.
If you have further questions on short sells call Realtor Dave at 843.922.2003 or email me at firstname.lastname@example.org