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Virginia Short Sales are FAKE. Only 5% Close.
Update: This posting is oldy but a goodie(2/2008), More short sales are closing now, but this article still explains the process. Newer Short Sale postings here.
Most Short Sales are what I call "FAKE listings." Only 1 in 20 sells. In Arlington only 3 have sold out of 65 attempts.
I briefly went over Short Sales when I defined all SOL Homes including REOs, Bank Owned Etc. But Short Sales need more attention, as they are very tricky and misleading.
A Short Sale is a listing for sale that requires "Third Party Approval." That means that 1, or 2!!, banks are owed MORE than the list price. For example:
Home is bought for $500,000 with 5%, or $25k down. Home has a $475,000 mortgage. Value dropped below $475,000 If the seller is facing foreclosure, they slash their price for a quick sale A Short Sale is attempted at $450,000 If the bank accepts it, the BANK eats $25,000 (see Phantom tax for Seller Update 2/2010: laws changed regarding this tax) The Theory Behind Short Sales: Banks would be better off to accept a loss now, versus going through the legal expense of a foreclosure, just to end up selling it for less ... more

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