Philadelphia Short Sales - Another Successful Short Sale in Waterfront Square
Last week we had the settlement for our Philadelphia short sale listing for a condo in the Waterfront Square community. Our seller purchased his condo at the height of the market and for every month it was vacant, his mortgage payment was over $5,000 and his condo fee $1,000. The property was nothing but stress for our client as he had to fight through two evictions, damages from past tenants and expensive months when the condo was vacant. Even when he had it rented, the cash flow was upside down.
I was a little nervous taking this listing as the values in Waterfront Square have plummeted - the community is one of the highest percentage decreases in all of Philadelphia. He had two mortgages as well. But being a valued client, I vowed to help him get out of it. Fortunately, we found a cash buyer for the property as financing is tricky for this project as there are so many rentals in the building. There was a decent amount of haggling with his primary lien-holder but we were able to work it out. The 2nd lien-holder agreed to take a much smaller amount which is normal as they have very little leverage. The deal got tricky as mid-way the buyer decided to do financing instead of pay cash and had to go to several banks even with putting down over 40 percent.
An interesting note on this one is that our seller was not behind on his mortgage payments. There is a myth out there that for a short sale to work a seller must be behind on his mortgage payments which is not accurate. In a declining market and in these risky projects, often times banks are willing to take back what they can to get the cash back on their balance sheets to raise capital.
There is a new tower at Waterfront Square where many units are being listed for new construction. However, if I was a buyer looking to purchase in the complex, I would go after a foreclosure or a short sale as those prices are much better than the new construction listings. My prediction is that there will be many more of these listings (short sale and foreclosure) coming to the market since so many sellers are upside down on their purchases from 2005 to 2007 and will not be able to hang in there much longer. I also would not be surprised to see the new construction listings go up for auction at some point in the future.
If you are looking to do a short sale in Philadelphia, it is imperative that you contact an agent who is an expert in these transactions as that can be the difference between success and failure. I would recommend an agent who has completed at least 3 to 5 successful Philadelphia short sales. These deals can be extremely difficult and complicated and it is so important that if you choose to go in this direction, that you have the proper representation to maximize the potential for a successful transaction.
For some of our other Philadelphia short sale blogs please see below:
Philadelphia Short Sales - Another Succesful Short Sale in Point Breeze
Philadelphia Short Sales and Short Sale Success - The Somers Team
Short Sale Specialists in Philadelphia
Short Sale Specialists in Philadelphia - Plan and Prepare for Success
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