I am wondering what a "short sale" is on a house...? I am looking to buy and have noticed several properties which note "subject to short sale approval" or "short sale possibility." Thanks!
2007-07-22 05:25:08 · 5 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
That means that the seller may be having some financial issues and needs to get out from under the house. Short sales, not always, but are usually a last ditch effort for a seller to get rid of a home before they walk away from it...but they don't come with the liens that a foreclosure might...so they are much better deals, and can be VERY good deals.
The seller has negotiated with the loss litagation department of their lender, that the lender is willing to take less than what is OWED on the property, and that may or may not be tied to market value...every transaction is different.
So when you see, "subject to short sale approval" what the seller is letting everyone know, is that the loss litagation department has to approve the offer for the bank to release the mortgage when the transaction is closed.
All that means for you, is it may take a few days for a property contract to get completed, but I definiately would do a short-sale purchase any day of the week.
However...keep in mind that seller paid closing costs are usually not going to be in the package.
2007-07-22 07:45:21 · answer #1 · answered by Expert8675309 7 · 0⤊ 0⤋
They mean that the present owner owes more money on the house then it is for sale for. They generally don't go much lower then asking price, and are not into contigencies. The "short sale approval" means that the bank has to approve and accept your offer, not the owner (who is usually already been booted out).
2007-07-22 05:37:18 · answer #2 · answered by Anonymous · 5⤊ 4⤋
I'm going to venture a guess but you need to call a real estate professional regardless of what you read on this thing.
In stocks, short selling involves essentially selling something you do not own to a buyer and trying to purchase it later at a cheaper price. It involves margin or credit from a brokerage firm and is risky.
For example, I think xyz corp is to expensive and is selling at $100 a share. I short sell 100 shares of xyz corp at $100 a share. My hope is that xyz corp goes down to $90 a share relatively soon. Then I can buy back 100 shares of xyz corp at $90 a share to cover my position. In that transaction I sold the shares at the following price:
SOLD 100 shares xyz @ 100 = $ 10,000
BOUGHT 100 shares xyz @ 90 = $ 9,000
Since the stock went below the price I short sold it at I profited $1,000.
If the stock goes up though I could lose a theoretically unlimited amount.
If the stock goes up to $125 before I buy back I would have lost $2500 on the transaction.
The goal of short selling is to profit from a falling price.
2007-07-22 05:46:36 · answer #3 · answered by super genius person 1 · 1⤊ 9⤋
Call your local Real Estate Consultant, they will be able to answer all your questions.
2007-07-22 06:57:02 · answer #4 · answered by cc07 1 · 1⤊ 8⤋
Sorry---new for me---call and ask??? Could be made just for you...
2007-07-22 05:32:16 · answer #5 · answered by Gerald 6 · 0⤊ 14⤋