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Thursday, May 27, 2010

Real Estate Tip: Pricing a Short Sale

A short sale is considered a “distressed sale” because it is a property being offered for less than the mortgage(s) balance.  That is, an offer for less than the money owed that will require it be accepted by the lender(s).

Does that mean the seller/owner should not care what the list price (and subsequent offer) is? Of course not. 

In a short sale the lender is going to be “eating” the short.  How they handle that difference depends on the lender. They may turn around and offer the seller a note for the difference (seller still on the hook).  They may decide to write off the short and send the seller a 1099 with possible tax implications. There may be other routes as well (I am not an attorney or accountant.)

Regardless, the seller needs must be concerned about the list price.

Pricing a short sale way under the market may result in you wasting your time with an offer that is near "list” which is ultimately rejected by the lender.

Your short sale property needs to be attractively priced – priced at the market with a realistic discount due to the distressed nature of the sale.

How do you price your short sale? Market price minus a discount that will entice a serious buyer to make a serious offer

For information on short sales in Brevard County Florida, give me a call at 321-693-3850 or email me.

Gary Waters, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida

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