Yes, It could dtill be a short-sale. Many people that bought 10 years ago, refinanced or obtained second mortgages, HELOC's and otherwised encumbered the property so that now- the debt is higher than the market value.
Many sellers are just grabbing at straws- hoping that the lender will accept an offer for less than what is owed.
This is a great question. I have buyers ask me this all the time. The majority of the inventory these days is comprised of short sales and foreclosures. Many of the properties advertised as short sales, however, have not yet been approved by the bank. The real estate agent knows that the house is not going to sell for what the current homeowner owes the bank, but the bank may not have necessarily approved such a sale. The real estate agent must attempt to sell the property for what is owed to the bank first and foremost, but if there is no interest or acitivity on the property the price must continuously be reduced until the price is right and an offer for purchase is submitted by a potential buyer. When there is a fully executed contract, it is submitted to the bank and the "short sale" approval process begins. This will likely take months, however, so I do not recommend this kind of purchase for anyone who wants a clear closing date or is in a hurry.
A short sale means that the sales price may be less than the total amount of the encumbrances on the property. Sometimes the listing price will just cover the total payoff cost of the sale. Most cases it will not. The seller is coming to closing with nothing and leaving with nothing, except for a potential forgiveness of their promissory note. The 3rd party lender leaves the closing with a payment that is less than the amount owed on the property, which is less than the sales price, because it has to pay all of the taxes, title fees, commissions, liens, etc. out of the proceeds. You need to take into account that a lot of people during the rapid appreciation in property values, either refinanced or took equity loans out, some up to 100% of the value. With the drop in housing prices, they now owe more than the sales price. Hope this answers your question.
Future Home Realty
In regards to the purchase price being lower - with the historical lows for interest rate many homeowners refinanced. Then you add the historical value increases that too made many refinance. So it is the current mortgage that you need to look at when and how much to determine what their pay-off is. If you search public record - you can findout what they owe and if and how much they will be short. If you would like instrucitons on how to do this in your county in Florida I would be happy to send instructions. Just get in touch with me. Thanks.
The real estate board requires specific language in listings for Short Sales, that is why you are reading the "may be" in the listing.
At best pricing on Short Sales are an educated guess.
I hope this helps!
CENTURY 21 Beggins
I hope this helps you.