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AnandPatwada

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What is a short sale in real estate?

I have been looking for a place in panama city and a lot of them are short sales. They say dont be frightened by short sale but I am unnaware of what it is. Also is foreclosure and or short sale a good place to look for a first time home buyer. And is panama city a good place to look if I hope to invest in real estate in the future?

949 day(s) ago

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kirand 		the seller does not have enough money to pay off mortgage loan balance at the closing.

so the seller asks their lender to forgive the shortfall balance.

Posted 949 days ago

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TomMoody 		In short a short sale is just what is says. The bank comes up short of what is owed. If the bank has not approved the list price of the SS then it could be a lengthy process. Find one where the bank has approved it and make an offer on that. Most banks will not take less than 5% of approved price so start at about 7% below list.

If you have not owned a home within two years there is a tax credit you get when you file your taxes if you buy a foreclosure, 3 years without owning if you buy a non-foreclosure.
This is 10% of purchase price up to $8,000.

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SamirAhmed 		short sale is your buying the property of what the owner owed the bank...no out standers profit....great way to go except for the the owners or was owners of the residence must oblige !!

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JeffSimons 		Not quite KelleyV. I am not certain about Panama City but I can tell you about USA.
A 'shortsale' is a property that is in PREforeclosure status and the current property owners can no longer maintain payments on for one reason or another. The homeowners do not have any equity in their properties so they are unable to sell by conventional means. Rather than have their home foreclosed on by the bank and ruin their credit for 5-7 years instead the owners attempt to 'shortsale' the property which will affect their credit for a lessor amount of time- typically 2-3 years until they are able to purchase a home again if all other bills are paid on time.
The shortsale is a very complicated process and may takes months for bank approval. Although the owners of the property are eager to sell the bank must also agree to forgive the difference or the debt from the amount they are owed by the current homeowner and the amount you place in your offer which would be current market value. Sometimes this could be hundreds of thousands of dollars. The bank also looks at cost to sell property vs forclosure costs , liens and/or second mortgages the first bank must pay off to give clear title, basically how much they will profit if they decide to grant this shortsale rather than foreclose on the owner and get paid from insurance and sell property again. And whether the owner is truly deserving of being granted a shortsale firt of all. They must have a true hardship and be in financial distress. Not just an investor who bought 10 properties who is now trying to sell properties because market has declined and he no longer wishes to make payments on bad investments. There are many factors the banks look at and because there are so many people attempting to shortsale properties (at least in US) it can take a very long time. The shortest I've ever seen is 3 months , the longest ever over a year. It may be quite different in Panama, I am not sure. But here in the US- for the buyer- it should not be called a 'shortsale' at all. It should be called a ' longsale' and you need to know before placing an offer that these transactions require a lot of patience. Also know this-NOT ALL SHORTSALES ARE APPROVED. Not even half that are in submitted to the banks are ever approved which is why you see so many bank owned or REO listing(what a property becomes AFTER it is foreclosed on). So you could be waiting for months only to find out the bank says NO. If you would like to purchase a property in a quicker timeframe is better to look for bank owned or REO property if it is available. Or buy from a homeseller not attempting to shortsale at all. Find yourself a good real estate agent from a reputable firm (like RE/MAX). Make sure they are a Buyers Agent so they will be looking out for YOUR best interest. They will have designaton ABR (Accredited buyers Representative) on their business card. Also look for CDPE. This stands for Certified Distressed Property Expert. They have taken extra education for shortsales & foreclosures only. They will be able to fill you in and inform you of all relevant information in your locale.

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