Hi Gary. Ive heard you and others talk about short sales. What is a short sale?
***ANSWER:
A short sale (aka “short pay”, “short pay-off) is when a lender or lienholder on a property agrees to receive less than the balance due when the property is sold. Ill tell you WHY theyd ever agree in just a moment
Short sales can be an owner’s best — or only — option when they owe too much to otherwise allow a sale.
Example:
Jack Jones buys a home zero-down @ $500,000. Suddenly Jack has a “hardship” (increased adjustable loan payment, loss of job, divorce, illness, etc.) and must sell. But, similar homes are now selling @ $490,000, which would yield Jack $455,000 after selling costs. He owes $500,000, but can only net $455,000 from a sale.
Jack lists the home for $490,000, SUBJECT TO A SHORT SALE. Jack’s Realtor (whos an expert in short sales) finds a buyer and negotiates with the bank and to take only $455,000. Why? Because they don’t want to end up foreclosing on the home and losing even MORE money.
The sale closes and everyone is happy and/or relieved.
Short sales require experience and knowledge to be handled correctly. The average agent does NOT know how to correctly handle a short sale and advise their client.
Short sales were common in the 90’s when the market was down. I did 200 of them and as you can guess Im well versed in the process. Several of my clients are doing or considering short sales right now.
Do you or someone you know owe too much to sell? Call me for a free, confidential, no-obligation consultation to decide if a short sale is the right move for you. Call me at (858)457-KENT.
