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Seems strange, but maybe not rare?

Posted by mary_md7 (My Page) on
Sat, Dec 6, 08 at 10:03

DH and I cruise and other sites keeping track of homes in areas we are considering for retirement. One of them is the Triange area of NC.

So I see a house offered for "preforeclosure sort sale." It says the owners just closed on this new construction home in February but are relocating to improve job siuation (layoff, I guess).

It is on the market for $9k less than their purchase price. The listing price is $325K, their purchase price was $334K.

Now, even if they financed 100% and have a loan pricipal of $334K, for a sale at $325K to be accepted as "short sale" (less than owed) means they don't have $9K + commission in equity/downpayment plus cash, right? That is, a sale at $35K plus 9K would satisfy a 100% loan of $334K. The realtor commission would probably be somewhere in the area of $20K unless it's a discount service. (But would the bank pay a full commission if they are losing money?)

Or maybe the "short sale" thing is designed to create a bidding war?

Follow-Up Postings:

RE: Seems strange, but maybe not rare?

The bank usually negotiates with the agent on the commission too.

RE: Seems strange, but maybe not rare?

The loan amount is public record. You can check at your county/city/town, etc. Loan info is always recorded(part of public record). The documents state the loan amt, the rate, the term (5/1 ARM, 30 Year fixed), the bank and lots of other stuff. If 2 loans, you see both.

If the municipality has on-line records, this should be easy to find. Otherwise, you might need to go in-person to check the records.

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