Can anybody explain what exactly is a short sale …what makes a property a ss canidate?and maybe a brief example of a short sale .
I am a newbie looking to get into maybe SS wholesales etc.
Thanks inadvanced
B
Short sale - A sale of a property in which the proceeds of the sale fall short of what the owner still owes on a mortgage.
Short sales can be caused by a number of reasons: loss or decline of income and higher interest rates being among the leading causes.
Usually, the owner has to be behind on mortgage payments before a lender will consider a short sale. The owner (borrower) has to convince the lender that he/she cannot make the mortgage payments and it is in the best interest of the lender to accept a sale where they will recieve less than the amount owed.
Example: A person loses his/her job and cannot pay the mortgage. This person either lists the property for sale with a real estate broker or attempts to sell it without assistance. A buyer makes an offer but the offer is lower than the mortgage amount. Either the listing broker or the owner submits a short sale package to the lender. In the package is a “hardship letter” in which the owner spells out his/her tale of woe as to why the mortgage payment cannot be paid. Other documents are included (listing agreement, opinion of value, etc.) with the package.
The current market seems to be such that a short sale can be bought for about 20% under similar places in the same area.
Short sales can take a long time, mostly in getting the lender to agree to the sale. They are looking for a higher price. Once accepted, the sale will go very fast - within 10-15 days.
Hope this helps.