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I have seen many homes for sale that say "this is not a short sale". What does that mean? Is that good or bad? Also I see alot of house that say that the asking price will not cover the cost of the home, what is that about, either it's the selling price or it's not, right?
A short sale means the bank will take less than what is owed on the house. Most likely the owners bought at the height of the bubble and the house is not worth what they paid for it. For example, in 2006 the owners bought a house for $400,000 and put no money down. So their mortgage is for the full $400,000. Meanwhile, the house is only worth $320,000 today (probably much less, but for arguments sake lets just say it only lost $80,000 value) The bank knows it's not worth $400,000 and they know nobody is going to pay that. So instead of going through the lengthy and expensive process of foreclosing on the property, they agree to a "short sale" where they will take less for the house and write off the remaining balance. This is especially helpful to the seller because it doesn't adversely affect their credit and horribly as a foreclosure.
When they say it's not a short sale, they are saying also that you won't have to go through the lengthy waiting period to find out if you got the house or not. We put an offer on a short sale, it took 2 months to find out whether the bank accepted the offer or not. We ended up finding another house and told the bank to forget it. I've heard of banks taking much longer though.
I have seen many homes for sale that say "this is not a short sale". What does that mean? Is that good or bad? Also I see alot of house that say that the asking price will not cover the cost of the home, what is that about, either it's the selling price or it's not, right?
"This is not a short sale" is just something many agents put in a listings description to assure all those that look at the listing it is not a short sale. As other's have mentioned, short sales can take forever and end up badly, so many buyers are so turned off short sales they won't even consider them (rightly so). The listing agent just wants to make sure all those looking at the listing know it's a straight, normal sale.
As for the comment you seem to be seeing alot about "the asking price may not cover the cost......" etc. Basically it is the standard language the local MLS makes us use to identify a property being in a short sale situation. What the actual sentence means is that even an offer at the full listing price offered may not be enough to satisfy all the leins on the property (mortgages, HOA dues, Taxes, etc). Warning all those looking that those issues will have to be dealt with in order to sell you the property with clean title.
They want to imply it is a good deal and won't have the headaches of the normal short sale. While there are some great deals around with the short slaes they arent for all investors. They require patience and the ability to act quickly when the time comes and capability to take ones time when needed. Some short sales can take upwards of 6 months. and 3 is not uncommon. By not being a short sale the owner can transact the deal much faster than a bank will. At this point the time to close will be most up to the lender providing financing.
"This is not a short sale" is just something many agents put in a listings description to assure all those that look at the listing it is not a short sale. As other's have mentioned, short sales can take forever and end up badly, so many buyers are so turned off short sales they won't even consider them (rightly so). The listing agent just wants to make sure all those looking at the listing know it's a straight, normal sale.
As for the comment you seem to be seeing alot about "the asking price may not cover the cost......" etc. Basically it is the standard language the local MLS makes us use to identify a property being in a short sale situation. What the actual sentence means is that even an offer at the full listing price offered may not be enough to satisfy all the leins on the property (mortgages, HOA dues, Taxes, etc). Warning all those looking that those issues will have to be dealt with in order to sell you the property with clean title.
Interesting that you say this....I completed a short sale on a property I owned up North and it was done in under 60 days...It was a pretty quick transaction from my perspective.
Interesting that you say this....I completed a short sale on a property I owned up North and it was done in under 60 days...It was a pretty quick transaction from my perspective.
Some go smoothly, but many don't. It all depends on the lender(s), agents, seller, and buyer involved. 45-60 days is usually the minimum time needed to get a sale approved from start to finish. Since the sales are now more common and banks are streamlining their processes they have gotten better in some cases, but there are still many buyer's simply turned off from even looking at them....hence the "this is not a short sale".
The bank has the option to write it off or go after the seller for the difference. If they write it off, a collection company can purchase it and still go after the seller. It doesn't matter as far as your credit is concerned, it still is BAD.
Honestly, "not a short sale" really is a double check for "savvy" buyers.
Most buyers look through tax and sales records. If a buyer sees a home sold for $400K in 2005 according to tax records they can easily find online. But sees the home now listed for $320K and also sees "not a short sale" That means the homeowner (seller) is willing to take a lost. Either they put a ton of cash downpayment or they have enough cash to bring to the table to close the deal.
"Not a short sale" means this is a regular sale that can close quickly. The listing is screaming, it's listed at a fair market price (most of the time) and it's not considered a distressed sale (short sale/foreclosure).
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