My seller owes $202,000 but the market value on the house is $160,000.  We have a contract for $163,000 with the seller agreeing to pay closing costs of $4800 and provide a warranty. 

My clients have tried borrowing the money from several banks but of course, no one is lending money right now...especially without collateral.  So our only real option is to have the lender agree to a short sale.

There is a first lien for $137,000.  That one can be paid by the proceeds from closing.  The second mortgage is for $65,000 with Countrywide.  That's the one we're trying to arrange a short sale with.

After selling expenses including commissions, revenue stamps, and assorted other fees, the seller would need $55,000 to be clear. 

So today I gathered together the sales contract, listing agreement, current CMA, net sheet, showing history and price reduction history.  I faxed those things in to Countrywide and now we wait while it travels through the system.  Countrywide says an accurate estimate is 30 days or so to get it done.  We'll see.

I think the CMA will help convince them that our contract price is good enough to go with.  The buyer is strong and willing to work with us.  The seven comps I found include two new construction sales (which are the highest prices) and five foreclosures.  The average sales price after adjusting for square footage is $160,000 while the average of the five without the two new construction homes is in the $140's.  Since we listed it on June 23rd, we've had four showings.  The first one didn't occur until two price drops and three months later.  It was listed before me since February, so there were five total price drops along the way. 

So the market is definitely challenging for this particular house. It was a CP Morgan house to begin with.  That's the first strike.  Then the sellers refi'd to pay some debt.  Which was basically just prolonging the inevitable.  Strike two.  Then the market for financing got crazy.  Combined with the less than ideal location and this one has been a struggle.

I'm just hoping the short sale is approved and this whole thing happens in 30-45 days.  We're thinking of doing a rental agreement in the meantime so the buyer can go ahead and get out of the apartment she's in with her four kids while still protecting both parties in case the worst case happens and the short sale doesn't work.

If anyone has any advice or comments, I'm always open to it.