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I was contacted by a friend of mine in another state who has a property up for sale that he has had on the market for some time with no offers. I offered him some advice and he said after speaking to his broker, his broker said there was a possibility he (the broker) could talk to the bank and initiate a short sale. My friend has no financial hardship in regard to paying the extra mortgage aside from it being a pain in his arsh. I told him that I never heard of a bank allowing that since he has been paying on it regularly.
Have any of you ever seen this done prior?
The idea was to get the bank to accept a lower price for the home, allowing the broker to lower the asking price and hopefully provide some more interest.
From everything I've read short sales are the last resort before foreclosure. The homeowners are usually in financial straits and payments are months behind.
So your friend just wants to get out of his investment via a short sale because he doesn't want it anymore and can't sell it for enough to cover his current mortgage ?
Sounds like a shady broker too for even suggesting it.
What I have heard for people that have tried this is that the lender agrees as long as the seller signs a promisorry note for the remainder.
There is one home on the market in my area right now listed as a short sale and the seller was not served with a notice of default. It has a pending offer to the bank, but it hasn't been accepted or closed yet. I'm waiting to see what happens with that one.
Your friend is what's wrong with the economy. If he's not having trouble making his mortgage, why on Earth does he think he should receive assistance from the bank? People are just becoming more cowardly by the day and trying to get out of everything with no repercussions and it's really disturbing.
If your friend gets the bank to agree, I'm sure the bank will destroy his credit for it AND make him sigh a promissory note to pay it back, so it'd be a stupid decision.
That broker should have his license stripped and your friend should man up and realize that you don't lose money if you don't sell.
"If he's not having trouble making his mortgage, why on Earth does he think he should receive assistance from the bank? People are just becoming more cowardly by the day and trying to get out of everything with no repercussions and it's really disturbing."
I'm not sure I follow...how is signing a promissory note, which the seller will undoubtedly be required to do, "cowardly" and without "repercussion"?
"That broker should have his license stripped..."
Again, I'm not able to determine the issue here...what law and/or guideline are you suggesting that the broker has violated?
You shouldn't do a short sale and in most cases can't unless you're behind on your mortgage payments.
I would advise your friend to take it off the market for awhile and try re listing when the market is better.
What I have heard for people that have tried this is that the lender agrees as long as the seller signs a promisorry note for the remainder.
There is one home on the market in my area right now listed as a short sale and the seller was not served with a notice of default. It has a pending offer to the bank, but it hasn't been accepted or closed yet. I'm waiting to see what happens with that one.
Let us know how this turns out.
My area has not been hit too hard with short sales or foreclosures, yet.
About half of the short sales are advertized as " potential short sales". To tell you the truth, I do not think many of the listing agents have a clue.
I completed two short sales last year where the seller was not behind on payments. But they were experiencing a financial hardship that was beyond their control.
Exactly. And there are people that do a short sale even though they are not behind and take an unsecured loan back...it's easier than carrying the whole mortgage and they need to get out from under.
It's funny to me how so many people make judgements and pronouncements when it comes to this stuff. There is NOTHING set in stone.
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