Short Sale Example

I’ve been on the telephone explaining the anatomy of a short sale to folks.  For those of you who need a visual to help learn, here is a post for you. 

First point I want to make is that there are a great number of people standing on the sidelines and watching the housing market, wondering when will be the right time to own a home.  Add to that, there are a great number of distressed sellers who are over-mortgaged in homes and need to exit gracefully.  So, when is the right time to buy?

It’s a buyers market, is that when a buyer should consider buying?

Or should a buyer wait until it becomes a sellers market to buy?

Keep in mind, you [the buyer] are not buying an index of home values; you are buying one single-family home.  A home, a yard, a garage, a white picket fence as the case may be.  Maybe the index of all homes in your area will see price declines for the next couple of years.  Should you then wait to see when prices have bottomed out to enter the housing market?

Let me answer these questions for you with these two words: Short Sale

Take this home in a neighborhood of homes in the around $200,000 range.  The property has a mortgage balance of $170,427.83.  The lender sent a discount payoff agreement for $92,000.  The buyer is buying this home for $92,000 and the lender is forgiving the remainder of the debt.

There you have it – the short sale.  I thought you’d like it.  A real estate buyer’s market doesn’t get any better than this.  What was it you were waiting for exactly?

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