Would you buy this ?

Looking at a home that is a short sale. Is it safe to buy this way ?
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What is a short sale. Short Selling to me means 'selling short" to profit on price falling. I have no idea what that means for houses.
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It mans that the bank is letting the current owner out of the mortgage by selling the house for less than they owe, because the bank thinks it will lose less money this way than by foreclosing and selling it themselves.
I have no useful info on whether buying one is good idea or not.
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Its only a bad idea if you cant sell it or live in it after you get it.
Jimmie
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Its the latest "morph" of the English language.... it "now" also means giving the house back to back, walking away, "jingle mail" (keys in the envelop to the mortgage servicer, w/o a payment)
I have no idea how it got started but it spread faster than the swine flu...might be to il-informed on the TV news
cheers Bob
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wrote:

Not exactly. In a short sale somebody owes more than the house is worth. The bank agrees to forgive the mortgage for the amount of the sale. http://www.nolo.com/definition.cfm/Term/51715E63-5BC5-4DCE-B5E96F71DFF3D5AB/alpha/S /
The pragmatist in me says it looks like a good idea for everyone involved. There is another part of me that sees a lot of room for collusion and abuse.
Jim

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Jim-
You are correct...a "short sale" is a more orderly / civilized / cheaper / faster way to resolve the "underwater" problem, than a traditional foreclose. But the results are more or less the same:
Loan holder loses capital, borrower loses down payment (if any) & the house.
anyone know how this effects the borrowers credit compared to a full blown foreclosure?
Is the "short sale" less damaging to credit history?
cheers Bob
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wrote:

Absolutely a good way to buy a home. I believe there are no guarantees from the bank as to the condition of the house so if you go short sale make sure you get a thorough competent inspection done.
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Assuming Larry's definition is correct.

it will lose less money this way than by foreclosing and selling it themselves.

And the home is not located in Florida, Nevada or CA and is in a good neighborhood I would seriously consider.
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It transacts pretty much like a "normal" sale expect the "seller" is usually the bank. Here in SoCal even traditional realtors are handling some of the sales of bank owed homes.
Just evalulate like the purchase of any home.
Check local rents getting a house in decent shape for 10x yearly rents (or less) is most likely a great bargain getting a house in decent shape for 20x yearly rents (or more) is not
in between is where most normal deals get done (not in 2004 thru 2006)
cheers Bob
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desgnr wrote:

http://homebuying.about.com/od/buyingahome/bb/BuyingShortSale.htm
Some very interesting information on this in the above link
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The bank won't go for it, and you'll run into many snags there. If you have cash, then as they say "a fool and his money............................."

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