Friday, February 6, 2015

The Amazing $354/sqft Waterfront Short Sale Condo in Shore Club Newport

A blink of the eye and the amazing $354/sqft waterfront condo in Shore Club Newport was under contract. Listed at $449,900, this 1270 sqft unit was priced way way too low (comparable sales were $850,000-$900,000), and it was a short sale.
Image courtesy: MLS Listing

The listing drew a near frenzy of activity, with over a dozen all-cash offers in place in less than 24 hours. The unit is now listed as “Under Contract.”

This listing came with the following caveat: “Subject to 3rd party approval Price may increase up to $150,000.00 to satisfy Multi Liens Buyer must be patient and understanding of the situation.”

As I do with any financially distressed property, I did a quick lien search and found that the sellers not only had mortgaged the property, but they had also unpaid property taxes (tax certificates had been sold to several parties), unpaid condo association dues, and to top it off, a lien from the IRS. I then added up all the liens, as well as any expected penalties from the delinquencies, which is some instances can be severe.

From a short sale buyer's standpoint, it is important to understand and calculate what you would be on the hook for.

It is also extremely important to evaluate whether a short sale would go through. The first step in this to to estimate if the bank indeed agrees that the seller has financial hardship is in unable to pay them back in full. The second step is to determine what selling price, below market value, would be acceptable to them. These steps need to be repeated for all the junior lien holders as well.

A majority of short sales fail because banks cannot agree on price and terms. In instances such as this, a debtor who is ABOVE the mortgage company, in this case IRS, the property tax lien holders (in reverse chronological order), and South Shore Condo Association, can each initiate a foreclosure process based on their available timeline, and in essence wipe out the junior lienholders, including the banks.

Will this short sale go through? Will one of the people who put in their offers yesterday win the lottery? Or will a wild card event like a foreclosure upset the apple cart?

Are you interested in buying a short sale or foreclosure? Talk to me, I am a Short Sale Foreclosure Resource certified Realtor, who can guide you in the process and maybe land you a deal of a life time.

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