Welcome to my new blog!
What is a Short Sale? The easiest definition would be that a Short Sale is the sale of a property where any, and/or all, lienholders release their lien(s) for less than they are owed.
For example, Joe and Susie own a house in Denver, Colorado. They bought the house in 2007 with an 80/20 loan. The purchase price was $100,000 - so the 1st mortgage would be $80,000 and the 2nd mortgage $20,000. The house now appraises at $75,000 and Joe and Susie both have lost their jobs within the last year. You can see the dilemma!
Through a Short Sale, a Buyer can be found at say $75,000 (with some innovative listing approaches!). We would then present the offer along with a LOT of other documentation to both mortgage holders. The 2nd would be offered around 10% of what they are owed: $2,000 and the 1st would get whatever is left after commissions, closing fees, tax escrows, etc are paid... probably around $65,000. If the banks had their own appraisal done and they came in at $75,000 or LESS - then the deal would make sense to them. For them to foreclose on the property and then turn-around and sell it for the same price would cost them significantly more time and money.
It's a fairly complicated process, but once you have been through a few as a Realtor, the overall transaction becomes much less-confusing. I have now done deals that have 2 or 3 mortgages, an home owners association with a backlog of fees, and a seller that has files bankruptcy! It doesn't always work out for the better - they say that the industry average for Short Sales being approved is somewhere between 20-30%... I'm hitting about 95%. But that's also why I'm called a Short Sale GURU! I'm going to try and give away my secrets here and get you all to purchase a book down the road if I ever get it written!
Truth is, I'm in the business of helping people. That approach has never served me wrong - putting others before myself is something I learned from my Mother. I hope you enjoy the posts as they keep coming and please don't be afraid to leave me a comment and as for any advise if you need any!
-JD WHITE, The Edge Realty, Inc.
President, Managing Broker
JD@TheEdgeDoes.com
http://www.theedgedoes.com/
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