Yes, even in a town like Greenwich, CT there are many short sales at all price points. Most of these sales go through the Greenwich MLS just as any other house and trade almost like any other house. You see, all a short sale is a sale that occurs at a price that is lower than the debt on the property. This is called short, because the seller won't be able to cover the mortgage amount. This, unfortunately, is fairly common today when priced are down say 30%-ish from a couple years ago and people took out mortgages with 80% LTVs meaning that if the price of the house went down 20% it would be in a short sale position.
This has little to do with the seller and their ability to pay off the
mortgage. The house could be in
backcountry Greenwich,
Belle Haven,
Riverside or
Old Greenwich, it doesn't matter. Now there
are several types of troubled situations ranging from a short sale, to a
REO (Real Estate Owned) to a foreclosure. There is a big difference
between a short sale and a REO or Foreclosure. I put it simply (I'd be
happy to sit down with anyone and explain it in full detail) the
difference is that in a short sale the seller is the original homeowner
and they participate in the process, while in a foreclosure or REO the
seller is (most likely) the bank as the original homeowner has left the
house.
The reason that a homeowner would stay around and help with a short sale as opposed to walk away from the property is that A) they can use the house until it closes and B) it has less of an affect on their credit than abandoning the house.
I would be happy to walk anyone interested in buying a short sale, REO, or foreclosure through the process. Right now I'm going to focus on short sales. As mentioned, a short sale shows up in the Greenwich MLS just like any other house. Whether you are looking at Byram, North Mianus, Glenville, or any other house in Greenwich, you don't need to do anything special when looking up a short sale. For all of my clients who receive listings from me (I'm always happy to send listings to anyone interested) or for those of you who have signed up in my Greenwich CT Real Estate searches on GreenwichCT.com, the short sales are already in there!
In most cases, it is impossible for the buyer/customer to distinguish between a short sale and a normal sale. This is for the realtor to help with. Many times all that is shown is a simple box in the full realtor's listing sheet that identifies the property as a short sale. In most cases a house would be priced just above the mortgage amount, so technically if the house might not be a short sale if it closes at the asking price, but for anything less it would be sold short.
For example, lets pretend you are looking at a house in
Cos Cob with an asking price of $650,000 and
decide on starting the bidding at $550,000. Your realtor may or may not
know if that amount is less than the sellers mortgage. Most realtors
should be checking the tax records to see what the mortgage amount is, but
some don't. One the seller receives the bid they will notify the buyer if
they are a) interested and b) if the bank might be involved. If the house
has a mortgage of $575k and the seller decides to accept the $550k they
will notify the buyer that they have accepted the bid, but need to contact
the bank.
At this point you will be essentially buying the house from the bank. Now this is where is gets complicated and buyers need patience. Some banks (mostly local) move fast and can accept an offer and proceed with a closing, while other banks (especially some of the large ones) can take forever in accepting an offer and then take their time in proceeding to closings.
If you have the patience, credit and ability to move quickly or take your time short sales can prove as great ways to get into homes at low prices, but remember, just like any other house this still involves negotiating with a seller to find a price that works for everyone.
For more information on Fieldstone Group or Scott Elwell, please visit their Douglas Elliman page here.
Zillow search for Greenwich CT Real Estate, Here.
