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Head on over to the real estate forum and read all the nightmare threads about short sales. Perhaps you just got lucky.
No, what we did was research our situation thoroughly before we got in it. I think a lot of people either fail to do that if they are looking to buy, or are desperate to sell and overlook things.
Either way, I maintain they are not that bad if you do them with a specialist who knows what they are doing, as we did. It was really rather painless. Primarily paper shuffling and waiting. I'll take that over an underwater mortgage that has no signs of improving in the next 10-20 years any day...
No, what we did was research our situation thoroughly before we got in it. I think a lot of people either fail to do that if they are looking to buy, or are desperate to sell and overlook things.
Either way, I maintain they are not that bad if you do them with a specialist who knows what they are doing, as we did. It was really rather painless. Primarily paper shuffling and waiting. I'll take that over an underwater mortgage that has no signs of improving in the next 10-20 years any day...
That's good for you. I think what you are failing to look over is that in many cases this isn't how it turns out and also differences in comfort level. Otherwise stats for short sales will be reflected so but it isn't. Also please don't assume lot of people aren't doing their research or diving in with non-specialist. I'm sure some are, but for most part in my experience many also are but still end up with bad result. For example, buddy of mine fell in love with house and had everything lined up but bank flaked out and after 5? month he learned he wouldn't get the house and he was devastated. Plus annoyed that he had to start house hunting all over again...even though he knew that could happen.
I don't know how many short sale you were involved in but if you are able to make it work for you repeatedly, that's great but do note probability is against you. It's like professional gambling, even if you are a pro at it you know probability is against you so loosing is matter of fact. Just need to make sure that you win more than amount you loose over a certain period. Just like any investing, you can't win every time but make sure when you win, it pays out more than your losses.
Lastly, I agree that its a win to take that over underwater mortgage. I would too if I could stomach the waiting but my comfort level isn't that high so I don't. :S
Someone please educate me on this. I looked up what a "short sale" is and it basically stated it is a step over foreclosure, where the bank is willing to take less than what the property is worth to avoid foreclosure costs. Why is there so much trouble involved with the sale of a home with a short sale?
The issue is the banks. They ultimately control everything as they have to agree to the sale. I highly recommend you go over to the real estate forum and doing some reading. They have a section specifically for short sales.
The issue is the banks. They ultimately control everything as they have to agree to the sale. I highly recommend you go over to the real estate forum and doing some reading. They have a section specifically for short sales.
Thanks for the direction - found a bunch of posts and I understand it now.
Someone please educate me on this. I looked up what a "short sale" is and it basically stated it is a step over foreclosure, where the bank is willing to take less than what the property is worth to avoid foreclosure costs. Why is there so much trouble involved with the sale of a home with a short sale?
It's basically a negotiation situation with banks. Your agent would do his/her best to get them to accept a reasonable amount for the property, that would be under 'fair market value.' That term is somewhat of a joke these days, IMHO, but that's what they call it. The market is/was anything BUT fair. But I digress...
If you have a decent property, you can definitely do a short sale and get out of your mortgage and move on -- even with two or more leans. It will have much less impact on your credit score. Typically a much smaller ding than a foreclosure, sometimes as little as 60 points. It won't be on there more than a few years and the most important thing is that your sale will be listed on your credit report as a 'debt forgiven at a reduced amount' which is much better than a creditor seeing that it was a foreclosure.
From the buying side, it's a matter of identifying a good property and then knowing what your tolerance level for this type of transaction is. For some people, shuffling paper and waiting for banks to come to an agreement is worth 10-30% (or more) off of FMV. For others, it's an enormous headache and shouldn't be considered. You'd have to know what kind of person you are before you got into one of these. And you have to really research the property.
Someone else mentioned earlier that you can't know who really owns it, etc., because of MERS, etc.,... well, the same can be said of many 'standard' RE transactions these days, so it's really a moot point.
I can tell you that I absolutely will look for a short sale or foreclosure when we are ready to buy again. But that's because I know what I'm getting myself into and the papershuffling, negotiationg and waiting doesn't bug me in the slightest. Perhaps because I did this in my job for quite some time. No, I'm not a lawyer... :P
Don't let any scary stories about SS or F scare you off. Do your own research and then decide. People love to rant on forums, but there are AMAZING deals to be had out there. Just ask the people who bought our place.
It's basically a negotiation situation with banks. Your agent would do his/her best to get them to accept a reasonable amount for the property, that would be under 'fair market value.' That term is somewhat of a joke these days, IMHO, but that's what they call it. The market is/was anything BUT fair. But I digress...
If you have a decent property, you can definitely do a short sale and get out of your mortgage and move on -- even with two or more leans. It will have much less impact on your credit score. Typically a much smaller ding than a foreclosure, sometimes as little as 60 points. It won't be on there more than a few years and the most important thing is that your sale will be listed on your credit report as a 'debt forgiven at a reduced amount' which is much better than a creditor seeing that it was a foreclosure.
From the buying side, it's a matter of identifying a good property and then knowing what your tolerance level for this type of transaction is. For some people, shuffling paper and waiting for banks to come to an agreement is worth 10-30% (or more) off of FMV. For others, it's an enormous headache and shouldn't be considered. You'd have to know what kind of person you are before you got into one of these. And you have to really research the property.
Someone else mentioned earlier that you can't know who really owns it, etc., because of MERS, etc.,... well, the same can be said of many 'standard' RE transactions these days, so it's really a moot point.
I can tell you that I absolutely will look for a short sale or foreclosure when we are ready to buy again. But that's because I know what I'm getting myself into and the papershuffling, negotiationg and waiting doesn't bug me in the slightest. Perhaps because I did this in my job for quite some time. No, I'm not a lawyer... :P
Don't let any scary stories about SS or F scare you off. Do your own research and then decide. People love to rant on forums, but there are AMAZING deals to be had out there. Just ask the people who bought our place.
Jojo,
This is the classic proof by anecdote: "Because it worked for me, it works". I can tell you that the vast majority of these transactions do not work at all, and my evidence is observation of thousands of them over many years both as an appraiser and an agent. Before I stopped doing them, I worked with many buyers who would diligently pursue the "paper shuffling and waiting" while trying to get a "great deal". They did their research, they did their due diligence, and they mostly did not get the house. Or they backed out after finding a real house to buy. A house that is actually for sale! In the case of a few deals that did proceed to closing, they got the house. At pretty much full market value after considering deferred maintenance that became their responsibility after closing.
In most cases, a short sale offering is an attempt by a seller to get a bank to take a low number that will never happen. So many short sales are not really on the market at all, they are trial balloons. And ultimately, if they sell at all, they sell for pretty much what they are worth. Somewhat lower than the comps, but usually needing work and investment. A bank will do an appraisal and multiple BPO's before settling on a price with a short sale buyer. And the price might be a tad below the market value as estimated by the pros, but usually not very much below.
Is it impossible to score an amazing short sale deal? No. Just very unlikely. And very likely to cause a bad headache, if not an actual stroke, for most people.
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