Posted by Scrooge McDuck on August 26, 2003 at 13:38:10:
A “short sale” is when a lender sells a mortgage for less than it’s face value. I don’t know why a lender would do this when there is equity in the house.
Subject to the existing financing means the mortgage stays in place, you take over the payments, and the property stays in the current owner’s name. But you get control, by putting the property in trust.
These are my guesses anyway. We won’t know for sure until someone asks the person who is selling the property. Why don’t you give us the name and phone number that was in the ad so we can call them for you or - here’s a wild idea - call them yourself.
Can anyone tell me what exactly all of this means?:
The Estimated Expense Of Repairs Needed Is: $5k
The Estimated Value Of The Home AS-IS Is: $125,000
Arrived At The Estimated Value By A: Appraisal
The Estimated Value Of The Home AFTER ALL REPAIRS Is: $135-$145
The Asking Price Is: “Subject To”
Terms Of Sale: Two options: subject to or cash sale with short sale. #1)Current Loan Balance is approximately $109k. Interest rate is 6.5%. Loan is 2 payments in arrears. Loan can easily be brought current. Take over existing loan, we will give you the deed and sign over beneficial interests in land trust( and give you short sale info). You give us $6k cash… or… Cash sale: We have Short sale in progress make cash offer; contract will be subject to bank approval; and we will negotiate short sale.
The Total Mortgage Balance Is: approximately $108k
The Total Monthly Payment Is: approx. $830.00 piti
What I want to know exactly is, what is a short sale, and if the house is bought “subject to”, is there any cash payment at all… or does this mean that the buyer takes over the loan, pays the 2 payments in arrears, and now suddenly has a $125-145k house almost for free?