Short Sales: An acceptable exit strategy?
Most of you who bought investment condos in 2005-2006 have told me the same gut-wrenching story: You’re desperate to sell and wouldn’t even mind taking a small loss if that’s what it took. At that point, I usually ask you what you paid – and what you are asking – before telling you that you are probably wasting your time – unless you’re ready for a skull searing haircut.
Condo prices have fallen so much that even taking a small loss won’t attract buyers at the moment. I usually suggest renting out your condo until things improve. Of course, it’s equally hard to find good renters right now – and even then, the rent usually doesn’t cover your mortgage costs – and half the time you wind up evicting them for non-payment of rent, yada yada.
However, if you’re still throwing good money after bad each month, there is one option available (– other than foreclosure) that you might not have considered at this time.
You may have heard the term “short sale” and may even have a vague idea of what this means. Basically, with a “short sale” a buyer will make the bank an offer which the bank then agrees to take – even though it may be substantially less than the amount you owe them. In theory, you then owe the bank the difference – but this can often be negotiated so that your debt is forgiven. Yes, your credit score will take a hit – but not so much as foreclosure or bankruptcy because the record will show “settled in full” instead of “foreclosed.” And if you’ve already begun missing mortgage payments, your credit score is probably already in the toilet.
Condo Metropolis is now partnering with some of Orlando’s short sale experts to help sellers who are considering foreclosure, so if you’d like to learn how to try and sell your condo using a short sale, contact us now and we’ll find out if this is an option that might work for you!