The real estate market has certainly changed since 2007, 2008. Today distressed properties make up for around 1/3 of our sales! That's astounded since in 2008 there were only 8 requests nationally for banks to entertain a Short Sale . The question I am asked most often is, what exactly is a short sale. A short sale is when there is more debt owed against the property than what the property is worth. You hear on the news that the 'buyer is upside down'. This is the same thing. The seller is still the one who holds title so they list the property with an agent (must be listed with a real estate agent) who will market it on the MLS. When a buyer brings an offer the seller will be the one to negotiate with the buyer. The third parties (lien holders ie. lenders, mortgage insurers, IRS or state taxing authorities, etc.) will decide if they'll accept the lesser amount owed them. They don't have to. The seller must show hardship. Typical hardships may be divorce, loss of job. The seller will write a hardship letter and include it in a short sale package that will be submitted to the bank.
Misconceptions are that a buyer can get a fantastic deal and bring in a low ball offer on these deals. That's not true and in fact the bank will want fair market value. The bank will also have an appraisal and BPO (Broker Price Opinion) done to verify value. There is not an accepted binding contract without third party approval because the seller isn't able to sell without this approval.
The market today is flooded with these transactions and professionals whether in the industry for 30 years or more are really just one or two years in. Professionals scrambled to learn these frustrating transactions including the attorney's as well as the banks. Hopefully 2011 will bring some positive changes with the response time to lessen the stress on all involved.
I took these photo's from my living room window. The snow flakes were like perfect round pearls. The photo doesn't show it so well but I included it anyway.
Misconceptions are that a buyer can get a fantastic deal and bring in a low ball offer on these deals. That's not true and in fact the bank will want fair market value. The bank will also have an appraisal and BPO (Broker Price Opinion) done to verify value. There is not an accepted binding contract without third party approval because the seller isn't able to sell without this approval.
The market today is flooded with these transactions and professionals whether in the industry for 30 years or more are really just one or two years in. Professionals scrambled to learn these frustrating transactions including the attorney's as well as the banks. Hopefully 2011 will bring some positive changes with the response time to lessen the stress on all involved.
MY EVERGREEN TREES