Here is a questions we got on “Short Sales”
I assume that this is a property that the bank has taken back and they want a quick sale to recoup losses as soon as possible – Is that correct?
Thank you for your inquiry about Treasure Island St. Petersburg Short sales.
The term “Short Sale” is really misleading for a lot of people. It is not because it is a quick sale and the banks want to recoup their losses quickly the opposite is the case, but I’ll explain a little later. Quite the opposite, St Petersburg Short Sales as well as all others will take an average from a buyer making an offer to closing approx. 3 to 8 month.
It is a “Short Sale” because the Lender will be “shortening” the amount that is owed. For example, somebody purchased a home and like many of us is now faced with the fact, that his mortgage is higher than what his/her home is worth right now. On top of it, he or she suffered hardship (divorce, loss of job, loss of income) and now can no longer make the payment on the mortgage. S
o a “regular” sale is out, since most people don’t have the money to bring to the closing table. Hanging on to house until the market comes back is not an option as well, since they are falling behind in their mortgage payments. That is when “Short Sales” come into play. The owner will contact an experienced Short Sale Agent here in St. Petersburg, and list the home asap.
The Real Estate Agent will price the house according to the market value and advertises it as a possible short sale. Once you have a buyer for the home, and you are under contract, the negotiation with the lender starts. As mentioned before, from the time you submit the contract to the Lender until it actually closes, it will be anywhere from 3 to 8 months. You must have some sort of “hard ship” in order to qualify for a Short Sale. The outcome of short sales can differ from case to case. Some Lender forgive remaining balances, some don’t. Some owners have multiple mortgages, which means 2 or 3 Lenders have to agree to the sale. At the end, the owner has to accept the Lenders terms and conditions as well. It is a difficult, long drawn out process and most likely will be negotiated by Attorneys (at least on our short sale properties).
To your question of example from our recent sales to show you the value of a short sale. The value for a short sale is, that you “might” be able to obtain the property for a little less than a regular sale. When we are looking at our St. Petersburg Short Sale and regular sales with realistic and motivated owners, that are not upside down, you will see that you will pay the same amount. That is because, ALL Lenders before finalizing the negotiations, are sending out Appraisers or Brokers, for a “BPO”. The BPO is a Brokers Price Opinion, which determines today’s market value.
That is the amount the Lenders are using in order to determine their “bottom line”. For example: We listed a Townhouse in Seminole Isle for $199,000. 2 contracts later and close 8 month later, we closed on the property for $212,000. There are all kinds of deals out there, but not all of the short sales are good deals. You can find those with regular listings or bank owned properties as well.
Please let us know, what it is you are looking for, we will be able to assist you in finding the right one here in Treasure Island – St. Petersburg.