Many of you call up and want to know how short the escrow has to be in a Short Sale! I forget sometimes, not everybody knows what a short sale is.
So I will do a short version, of what a Short Sale is.
Short Sale means - You are asking the bank to take a payoff for less than (Short)of what is owed. In most cases, the owner is usually close to foreclosure, and needs to sell the house immediately, the problem is - they owe more than the house is valued at in today's market. In the case I am talking about here - I had sold this house 2 years ago for $885,000, the buyers had 100% financing, and to top it off they chose an Adjustable Rate Mortgage, so not only do they owe more for the home than it is worth - their interest rate is now sky high. They are unable to refinance - who in there right mind would loan somebody $900,000 on a home worth $790,000 ???
Follow this link to preview home ( http://www.konahometeam.com/bin/web/real_estate/AR153261/HOME_SEARCH/KAILUA+KONA/1207325754.html?ZKEY=&acnt=AR153261&action=HOME_SEARCH&inwindow=&hs_action=VIEW_DETAIL&listing_id=REAGAD40513737&start=0&grp=ALL )
So we have put their home on the market at $799,000. - Subject to bank approvals.
Meaning the bank has 2 choices - let the home go into foreclosure - or accept the lower amount?
In most cases - at least as of recently - the banks are settling for the lower amount.
One of the problems with this - is that the banks are so overwhelmed with these - it is taking them 3-6 weeks to get an answer back to you. I lost 2 deals last year to exactly that - 6 weeks can be huge in this market. On an average last year, Homes in Kona dropped about $5,000. a month. So you as a buyer - take your time, do your due diligence, come up with a list of comparable sales, submit your offer, and what happens? From the time you started this process, to the time the bank finally gets around to a response - you have wasted almost 2 months of your time - whats 2 months mean - in last years market, it meant another $10,000 in equity - GONE!
So my buyers backed out - actually one tried to renegotiate with the bank - they told me to never call them again.
I did though - and actually the third time was a charm. A home in Hilo - seller owed $430,000, bank accepted $270,000, But we had comparables that justified the price.
Follow this link to preview the home ( http://www.konahometeam.com/bin/web/real_estate/AR153261/CLOSED_LISTINGS/KAILUA+KONA/1207325754.html?ZKEY=&acnt=AR153261&action=CLOSED_LISTINGS&hs_action=VIEW_DETAIL&inwindow=&listing_id=REAGAD39823786&start=0&grp=ALL )
I hope this helped you understand the short sale process a little more - and if you are looking for someone experienced to help you - please give me a call !
Thank You
Lance Owens (RS)
(808) 936-8383
Aloha Kona Realty Inc.
78-6740 Alii Drive
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