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    HOME SELLING

         SHORT SALES 101

Bank (and other lien holders) all agree (by cooperating together) to accept a sale price for a home that is SHORT of the price needed to pay the full amount(s) owed to all the lien holders. They will be short of being made WHOLE on the indebtedness that the home backs up.

They are actually saying to you as a potential buyer “If you pay us lien holders this amount for the home – we will RELEASE our liens, and you will be given a FREE and CLEAR DEED to the home. 

They are saying to the owner, “you borrowed this money from us and you signed the contract to pay it ALL BACK. This buyer has agreed to pay us an AMOUNT SHORT of what you borrowed. You still OWE US the remainder to bring us up to WHOLE.”

So you see in a short sale there are two dialogues going on. One to you the buyer, and another to the seller. The dialogue to you the buyer ends when the lien holders accept your contract to PURCHASE the home at the SHORT SALE PRICE and you receive the FREE and CLEAR deed.

Then the dialogue to the seller begins. IRS can be notified that the seller owes the LESS THAN WHOLE amount to the lien holders, and this can be treated by IRS as earned income. COURTS can be similarly notified and a judge can issue an order for you to pay. The CREDIT AGENCY can be similarly notified and they can enter unfavorable data into your credit records. From these records current and prospective EMPLOYERS can be alerted. Also other RETAILERS who you may wish to buy from. Also other LENDERS who you may wish to borrow from.

The SHORT SALE PRICE is the most important aspect of the whole proceeding. This price is what makes it possible for all the lien holders to

agree that they will take this low ball price as the best they can do to cut their losses. This price is what makes it possible for the seller to have owners rights to receive the HIGHEST low ball price to legally protect the owners.

This is why the price is not negotiated between you as buyer and them as lien holder. The negotiation has all been done between lawyers, judges, banks, home owner associations, insurance companies, investors, government officials, loan portfolio managers, mortgage servicer companies, risk managers, and a few more.  This is why the short sale price is firm.

It is a complicated process to arrive at this price. Several Real Estate Brokers and Appraisers are paid by the lien holders to do rather detailed research on the home and surroundings to establish a Fair Market Value, and this serves as a starting point to set a short sale price.     

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EXAMPLE OF ACTUAL SHORT SALE MLS LISTING

SELLING FOR BANK PRICE OF $269,000

PURCHASED BY OWNER FOR $440,000

BANK APPROVED short sale in a Wonderful Golf Course Community close to shopping and the White Sandy Beaches Of The Gulf Of Mexico

Listing # 200904132 12651 Hunters Ridge Dr Bonita Springs, FL

Listing Price: $269,900
County: Lee

Property Type Residential Single Family
Hunters Ridge
Beds 3
Baths 2
Year Built 1990
PID 064826B30030C0140
Directions Bonita Beach Rd East of 75 to Hunters Ridge Gate

COURT HOUSE RECORD Last Market Sale

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