The Reality of a Short Sale!

Over the past ten days I have been working with a property that is heading towards foreclosure. To sell it, the price will need to be less than the outstanding loan balance. This is called a short sale because it will be short of funds at closing to pay the loan balance and the closing expenses.

It is obvious to everyone that there is tremendous value in this property at the listed price which is below both the assessment value and the market value. So why is it, when we finally got an offer on the property, and we got two offers, that they are another $15,000 under the listed price?

Quite simply, Human Nature!!! The buyers are in the driver’s seat and the banks need to sell the property at the price the market will bear out, however low it is! Unfortunately, they are not helping the property values for the neighborhood that they are moving into by putting a sales comparable on record at that price. But at least, they are taking a vacant property off the market by buying it and moving in.