What is "Short Sale"??? Cannot be approve by bank?What is "Short Sale"??? Cannot be approve by bank??? I wanna buy a condo,which is "Short Sale". Does that mean there is only little chance for bank to approve at that shot sale price? how long could it take for bank to decide? also, HOA fee is $230, does that mean I have to pay $230 per... | |
The condo has a loan of $300,000. You are offering $200,000. The "short" amount is $100,000. If the bank says OK, you just bought the house for $100,000 less than what was owed. 4 months to decide.
As the new owner, you must pay the fees. Either monthly or you can pay it all on January 1st. It rises almost every year.
Basically a short sale is a situation where the seller of a property owe more than the property is worth. They are basically asking the lender/investor to agree to settle the lien for less than what is owed. What I am not sure about is the cannot be approve by bank. Without knowing all the details, it's difficult to say anything. There are many factors that go into deciding whether a short sale can be completed, such as who holds the lien. Many people mistakingly think its always a bank, this is not the case. Yes the bank can own the lien, they can also just service the lien and a private investor actually owns the lien or a larger investor such as Freddie or Fannie. In these cases, the investor has to approve the deal, not the serivcer so you have to make the investor happy. There are usually two other factors that hurt short sales, one is 2nd liens or home equity loans, again, depending on who the investor is, this can be easy to negotiate or difficult as the investor sets the guidelines. next is closing costs, especially with hoa/condo association dues, fees and transfers. With certain investors, there is a threshold on the amount of closing costs associated with the transaction. Concerning the hoa dues, I would be careful here, especially if the property is in fla. the associations usually reserve the right to raise the dues, and in fla, they can actually foreclose before the first lien due to fla being a super lien state.
The term "short sale" refers to the fact that the sale of the property would not result in the mortgage being paid-off in full. For example if the seller owed $100,000 and the net proceeds from the sale are $80,000 then the sale would be $20,000 "short".
Short sales are often times the best deals. There are several downsides, first of all they sometimes take over 30 days to get an answer. Secondly they will usually not allow for any repairs to the property. The key with a short sale is flexibility and patience.
As far as an HOA goes they generally never go down, but they do protect your property value.
For more information on short sales you can visit my website at:
http://foreclosuresnwa.com/Northwest_Arkansas_Short_Sales.html
Good Luck
