New Homes vs. Short Sale

Short Sales are when the proceeds from the current sale are insufficient to meet payoff of the outstanding mortgage debt and other liens. Banks, after protracted negotiation with the seller, ultimately determine the final selling price. It will be more market based after appraisal reports, not necessarily what the seller originally agreed to with the buyer.

66% of short sales
DO NOT go through

 Buyer backs out after wasting several months.

 Buyer dependent on seller for progress update as bank will only talk to seller.

 Seller renegotiates the loan and stays.

 Buyer’s tax dollars work against them. Banks make more with Federal grants subsidizing loan modification.

 2^nd mortgage holder refuses to participate, halting the short sale even if the 1^st mortgage holder approves.

 The home is foreclosed on. Short Sales and Foreclosure Departments within the same banks don’t talk to each other and coordinate their actions.

 The bank approves, but only at a higher price that the buyer rejects.

 Buyer has to use their good credit to turn on utilities for home inspection as seller has “no money.” Discovers months of unpaid utilities that must be paid before utilities will be restored.

 The bank approves and the home inspection paid for by the buyer returns issues – structural, mold, remaining life of major components – and the buyer backs away. 

New Home More Viable

There are several considerations supporting a new home over a short sale.

 A new home could be built to your choice of floorplans, options and colors in the 6+ months a bank takes to approve a short sale.

 The transaction WILL occur and you will actually move in.

 All new energy efficient appliances, AC, roof and other major components.

 Doesn’t need re-landscaping. A short seller usually practices minimal upkeep and repairs.

 Neighbors in a new development have higher mortgage eligibility criteria to qualify to purchase and houses are priced at current deflated market values while short sale/foreclosure neighborhoods enjoyed neither and issues may continue for decades.

 New home warranty is included while a home warranty is rarely offered and paid for by the bank or short seller.

 How much will it cost to make the short sale home equivalent to the new home, if possible? It may be less to purchase a new home!

About the Short Sale Photos

The Short Sale photos, like most photos on this web site were taken by Larry Gray.  These are actual homes that were offered as a Short Sale in the Orlando Metro area and the condition they were in when offered.  It runs the gambit. Some are very well cared for and others, publishable words can’t describe. In many ways it reflects on the owner concerning their motivation to cooperate and complete a short sale vs. just let the bank have it. I tried to show both extremes in the photos - some well cared for and nicely presented, and others...well.  If they don’t know what a broom or mop is, or how to roll garbage to the curb, how cooperative are they going to be with the bank to submit 3 years tax returns, W2’s, and other documents used in the negotiations.  As a buyer, that is a major consideration before you get your hopes up on a futile attempt.