A short sale is when an owner owes more on his or her mortgage than the property is worth, and tries to sell it (therefore, “owner” is a misnomer, isn’t it?).
There is no field in MLSPIN to check off if your client is conducting a “short sale”. The only way to find them is to do a keyword search, meaning it’s up to the listing agents to include the information.
Some sellers want you to know the property is a short sale; the idea being, you might be more eager to make an offer, because you might assume the owner is more eager to sell. Other sellers, though, don’t want you to know about it beforehand since if you know it’s a short sale, you might offer significantly less. The idea being, the seller might be desperate, plus he/she is already losing money, you might be able to get a deal, at their expense.
It’s important to know if an owner owes more on his/her property, especially if the owner is going to be asking his/her bank to forgive the difference on a loan. It means you, the buyer, are basically negotiating with the bank, not the owner.
You can often discern what an owner owes on his/her mortgage loan, by checking the Suffolk Deeds website. However, it is not complete, plus it is subject to error. Lots of errors. If you were my client, I’d simply ask the seller’s agent prior to making an offer. (Most agents would offer it up before an offer was made.)
A short sale was just advertised in the South End, 75 Montgomery Street. The list price is $325,000. If you look at the Suffolk Deeds site (well, if it was up, right now), you’d see the current owner apparently bought it for $500,000, in 2006. I am skeptical that there’s not more to the story since that’s a pretty dramatic drop. Perhaps they are looking for bids? Or, the $500k was a construction loan?
Regardless, it’s a unique situation, in the city, to see this sort of thing.
Oh, and I think there was a change of heart on the seller’s part of the seller’s agent. Although the Trulia listing clearly explains it is a “short sale”, the description in MLSPIN has been updated to erase any mention of it (although it is in the remarks, below).
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