Menifee CA – There have been many controversial figures on just how much a lender saves completing a short sale verses a foreclosure. Anywhere from 20% to 50%
So what exactly does happen after a home is listed as a short sale and for whatever reason it does not sell? ~~~and there could be many scenarios why it did not sell as a short sale~~~too many to mention in this blog.
For example, ~~~and this is a true story~~~short sale was listed for sale for at $225K. After a few months, the sellers received an offer for $200K
The offer and the short sale packaged was submitted to the lender. The lender declined the short sale and the lender started foreclosure proceedings. About 19 months later the house was put back on the market as a foreclosure. The house sold for $150K.
You can see pretty clearly why the bank lost so much money!
The house was relisted at $150K because during that 19 months the market had been declining. So they lost $75K in home value decline and about half of that amount was due to the downward spiral in home values.
The perception to a buyer is that bank owned homes are worth less. So this could be another reason why the bank loses so much money. Unless you are in a heavily saturated market where there is an abundance of buyer's and lack of inventory you will see buyer's lowball on bank owned homes all the time. Home are vacant and abandond and yards are not kept.
The bank also also lost interest income. The home would have sold for $200,000 twenty-one months earlier (17 months foreclosure time plus 2 months to put the home on the market and 2 months to sell.)
The banks pay the property taxes so at 1.5% of $200K Sor for 21 months that comes to $5250.
Another factor to consider is lost interest earned. On a $200,000 at 4.5% interest earns $9,000 annually. Over 21 months that comes out to $15,750.
I'm not a math wizard but as you can see the bank stands alot to lose if they do not complete a short sale. It is in the best interest of the bank to avoid foreclosure, work with the borrower to see a successful short sale through.
Thinking about a short sale? I can help you. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 951-315-3201
Sherry K. Kotvis
Allison James Estates & Homes.
Menifee Short Sales Realtor:
Phone: 951-315-3201.
WWW.MyForeclosureRepair.com
Providing Solutions One Homeowner A Time
View My homes for sale at <a href="http://www.sherrykloanmodhelp.com">www.sherrykloanmodhelp.com</a>.
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