The Short Sale E-Guide
Real World Short Sale Scenario
To help you understand the entire process from beginning to end, several case studies have been identified and analyzed for your own review and study. These scenarios will help you better recognize properties and situations that can benefit from short sale transactions.
Borrower
Situation: Divorce
Transaction Challenge: Buyer required to
increase purchase price by $1,500
Total Lender Loss: $52,095 or 23% (first)
DOM From List To Close: 129 Days
Outcome: Successful
Lesson Learned: Gauge buyer’s interest
as soon as possible and don’t be fearful to negotiate
with all parties involved in order to adjust the deal in order
to make the outcome successful.
Sue and Syd Seller owned this 2,344 square foot split level entry home for 8 years. The year prior to their financial distress, they obtained an appraisal and refinanced the current loan with a lender for $222,000.
The home suffered from abuse to walls, carpet and deferred maintenance. The home was originally listed at $198,500. Sixty days on market produced no offers, so the price was reduced to $189,500. A few additional weeks on the market produced two different offers: one at $175,000 and the other at $178,500.
The lender counter-offered at $180,000, on the required basis that their net proceeds would amount to no less than $169,905, after seller-related closing costs, commissions and past due property taxes. The buyers agreed to increase their purchase price from $178,500 to $180,000 and the Sellers received a letter of investor acceptance, outlining that the loan would be considered “paid in full”, with the remittance of the net proceeds.
The lender, in this true example, accepted a loss of $52,095 or a 23% loss on their total balance owed. This home was listed at the reduced list price on July 12, went pending on August 22 and closed on September 21, just three weeks prior to the scheduled foreclosure auction date.