Boca Raton Real Estate – A little information on Short Sales

We all know by now even in top areas in the county Palm Beach County Real Estate and within the county spots like Boca Raton Fl Real Estate and even Boca Raton Waterfront Real Estate can depreciate from time to time  and with that short sales can show up before too long.  Just what is a short sale?  A short sale occurs when a property is purchased save for $100,000 and then appreciates to $200,000 and the owner refinances the property for $160,000. The property then drops in value back to $100,000 and then the owner sells the property short of the current loan unpaid balance. So what’s happening is the current value is short of the current loan amount. The only way the property can be sold is by the current owner bringing the difference between the value and the unpaid balance of the loan to the closing or the bank letting the property be sold short of the current unpaid balance of the loan. That is what creates the short sale. The buyer of the property buys the property with a free and clear title but the seller goes away from the sale with out any money at all. The bank goes away from the property with a loss on the sale it’s just a question of how much the bank is willing to lose on the short sale. In the example I just mentioned the bank would lose $60,000 plus some expenses for example the commissions on the property to the real estate brokers, the documentary stamps which are due on sale which is a form of tax and probably some title insurance charges, closing charges, and attorneys fees, etc.

From a buyer’s perspective a short sale is to be considered because a property can be purchased for quite a bit less then a seller may want otherwise. It takes quite a bit of patients to buy a short sale because many times as a buyer you will have to wait 2,3,4 or more months many times to find out whether the sellers lender or lenders will approve the short sale. So not only do you have to initially negotiate with the seller on the deal you may later have to negotiate with the bank because in many cases the seller will not have any money to bring to the table that’s why they’re shortselling in the first place so the bank may come to you to ask you if you can add money to make the deal happen. So you may wait sometimes as many as 6 to 10 months only to find out the bank will not do the deal in less you bring a certain amount of additional monies to the closing. You may also find out down the road after waiting several months that the bank that is the sellers bank won’t do the short sale at all and instead besides it will foreclose on the property.  Whether you are considering Boca Raton Real Estate or any other you must weight all the points.