Selling ‘sinking’ homes quick is option
BY MARY SHANKLIN
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Published: November 7, 2009
ORLANDO, Fla. — Wanda Gibbons said the 4,000-square-foot Florida home she purchased at the peak of the market in July 2007 for more than $510,000 was just days from "going to the courthouse steps” to be sold at auction when she contacted attorney Justin Clark to explore a short-sale option in May.
She hired a real estate agent and got an appraisal that showed her five-bedroom pool home with the brick pavers was worth about half what she paid two years earlier.
"When I saw that appraisal, I thought: This was very disrespectful,” said Gibbons, who still owed about $459,000 on the house. "The home is in a neighborhood where houses next door were selling for $400,000. It was an injustice.”
A buyer quickly jumped on the $205,000 price but could not get a federally backed loan approved. Fortunately, Gibbons said, other buyers were waiting and signed a contract.
Short sales usually get offers within a few weeks, often from investors, said Clark, who has worked on hundreds of the transactions in the past few years.
Once Gibbons had a contract on her house, Clark submitted to her lender a package that included everything from the appraisal and a hardship letter to a sales contract.
"Looking back, I would say it was a great decision because it would take 20 years, or probably never, to make up the lost value,” Gibbons said. "It was a house on sinking sand, but I walked away not owing anything on the house.”
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