I'm looking to buy a new construction in a gated community that is short sale. They're over 30 homes in the subdivision but only about 5 are purchased. These homes are 3 years old also. I'm confused on why a new home would be "pre-approved short sale priced".
builders borrow money to build homes. They have to pay the banks/mortgage companies back. If the builder borrowed more money to build the house than it is now worth, it can be a short sale.
If the home is three years old, it is not a new home. If someone has lived in it, it's in short sale because they can't sell it for what they owe on their loan.
If the home has never been lived in and the builder still owns it...it's because builders also take out loans to build homes (which they pay back when the home is purchased). Obviously the builder couldn't get it sold to someone else fast enough and now they are having to get it off their books - and the only way they can do it is for less than what they actually owe.
Probably because the builder cannot sell them for what he originally set out to sell them for. When the builder takes on a project, he gets financing for that project. He has in a sense a mortgage on those properties he developed. Now that he cannot sell them for what he borrowed, he is trying to do a short sale.
3 yr old homes are probably worth 20-30 % less than their original selling price, which is probably less than the builder's cost, so he probably walked away
builders borrow money to build homes. They have to pay the banks/mortgage companies back. If the builder borrowed more money to build the house than it is now worth, it can be a short sale.
ReplyDeleteIf the home is three years old, it is not a new home. If someone has lived in it, it's in short sale because they can't sell it for what they owe on their loan.
ReplyDeleteIf the home has never been lived in and the builder still owns it...it's because builders also take out loans to build homes (which they pay back when the home is purchased). Obviously the builder couldn't get it sold to someone else fast enough and now they are having to get it off their books - and the only way they can do it is for less than what they actually owe.
Probably because the builder cannot sell them for what he originally set out to sell them for. When the builder takes on a project, he gets financing for that project. He has in a sense a mortgage on those properties he developed. Now that he cannot sell them for what he borrowed, he is trying to do a short sale.
ReplyDelete3 yr old homes are probably worth 20-30 % less than their original selling price, which is probably less than the builder's cost, so he probably walked away
ReplyDelete