September 25, 2009
Should I consider homes that are listed as Short Sales?
What is a short sale?
It’s a fact of life these days that a number of homeowners can’t afford to pay off their mortgages with the proceeds of a home sale. This prevents them from being able to give a clear title to the 
buyer, unless… the seller’s lender agrees to release their claim to the home without being paid off in full.
Many times when this happens the seller is referred to as being “upside down” or “underwater” on the loan.
Banks realize that taking less than a full payoff of a home loan can be in their own best interest, if the amount they stand to loose is less than what it will cost them if the home goes to a sheriff’s sale and foreclosure. (See my blog post about foreclosures).
Are short sales good deals?
They can be, but it’s no more likely than getting a good deal on other similarly priced properties. The market drives the price, not the financial situation of the seller.
What are the downsides of a short sale?
In addition to negotiating an agreed upon price with the seller, there must also be negotiation with the seller’s bank to accept a reduced loan payoff. Herein lies the problem. The bank is not obligated to give an answer within a time frame that most buyers find reasonable. They are not obligated to answer at all! If you, as a buyer, need to know in a timely manner about when and if you’ll be committed to purchase the home, you are best off not dealing with short sales.
There are cases where it can all come together, and having a realtor who is knowledgeable and will work hard for you is critical to a successful short sale purchase. Please feel free to contact me for more details and a list of homes that will be of interest to you.
Posted by:
Mike Pfammatter
Tagged With:
clear title,
foreclosures,
mortgages,
reduced loan payoff,
sheriff's sale
and short sales
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