Why Would a Lender Accept a Short Sale?
Lenders & financial institutions are in the finance business, not the real estate business, and they do not want your property. In fact, a foreclosure has far reaching financial and regulatory consequences that most people are not aware of (see below). I can help you negotiate a Short Sale and avoid foreclosure as a Certified Distressed Property Expert (CDPE).
The True Cost of Foreclosure-
Example:
- Property w/market value of $200,000
- Owner owes the bank $190,000
- Highest offer the agent has submitted is $180,000
Short Sale:
Sale Price (Immediate): $180,000
Closing Costs: - 4,000
Commissions: - 10,800
Proceeds from Sale: $165,200
Loan Amount: $190,000
Less Proceeds from Sale: $165,200
Lender Loss: $ 24,800
Foreclosure:
Market Value: $200,000
Loan Amount: $190,000
Sale Price (After 6 months): $200,000
Seller Concession: - 6,000
Legal Fees: - 7,000
Taxes: - 500
Insurance: - 1,000
6 Months utilities: - 600
6 Months maintenance: - 600
6 Month Interest Loss: - 6,650
Association Dues: - 1,200
Closing Costs: - 4,400
Staffing Costs: - 2,000
Commissions: - 12,000
Proceeds from Sale: $158,050
Loan Amount: $190,000
Less Proceeds: $158,050
Lender Loss: $ 31,950
In many cases, the bank is better off with a below market value offer even if they are able to sell a property in 6 months after foreclosure for full market value.