Home Buying in 28390>Question Details

Cate Brown, Home Buyer in Fayetteville, NC

What is a short sale? What does it mean when the advertisement says 20K plus equity?

Asked by Cate Brown, Fayetteville, NC Sun Jan 23, 2011

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3
Richard Malsed’s answer
Tony and Jeff are right...if the property has equity, by definition, it isn't a short sale. The only way they could possibly twist it to sound like the buyer would have 20% equity is if they priced the home that much or more under market value. If they have done that, the chance of the short sale being approved by the bank would be slim. The bank is going to want every last dollar that they can get, and want that 20% for themselves.
0 votes Thank Flag Link Mon Jan 24, 2011
A short sale purchase with a stated equity amount? The market can only support a certain price in certain areas. If the home could sell at market value it effectively wouldn’t be a short sale. That said when a homeowner becomes delinquent; the property can be sold as a short sale. The bank agrees to a lesser amount than is owed on the loan. So in some cases a property can be bought for under fair market value but not necessarily gain “equity”.

Kindest Regards,

Jeff Monfils
Director North Carolina Operations
BIC / CFA / CSSA
Bastille Real Estate
Foreclosure Avoidance Consultants
3611 Mt Holly-Huntersville RD Ste 204-310
Charlotte NC 28216
704.975.7616 | 888.807.4848 ext. 505 | Fax 866.662.3929
Philippians 2:3&4
0 votes Thank Flag Link Mon Jan 24, 2011
A short sale is when after the home is sold the proceeds from the sale will not be enough to pay off the amount owed on the mortgage. That being said there would not be any equity left
0 votes Thank Flag Link Sun Jan 23, 2011
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