Short sale

[fudion14]

Has anyone on here had to do a short sale ... what was the process like?

[AmyTrivitt]

What is a short sale?

[sflynt]

What is a short sale?

I second that. I've never heard of a short sale.

[lvstephanie]

Are you talking in terms of stocks? In that case it is an option that can be most easily described as betting that the stock / commodity / etc. will go down instead of up. Basically in order to make money on investments, you need to buy something when it is low in price and sell it when it is a higher price. With a short sale, you go about the process backwards... You sell something at a higher price and promise to buy it at a later date (hopefully at a lower price). Note that you originally are selling something you do not have in your possession; thus you borrow the item from a 3rd party in order to sell it, and then promise to purchase the loan at a later date.

There is a certain amount of risk to short selling, however -- more than with normal investments. With normal investments, an item can never go below zero. Thus when you make a purchase, you know how much you can lose (ie you lose all of the purchase-price for the stock). However with short sales, it is possible to lose much more than you expected, since prices can always go up where sky's the limit. For example, you may short sell 1000 shares of Shards O Glass Popsicles at $10 a share since you don't think any sane person would want to eat popsicles that had embedded shards of glass in them. However, it turns out that with a huge marketing campaign, the youth market that wants to be daring, etc. sale actually skyrocket bringing the price up to $100 a share when you are require to buy back your loan meaning you have to come up with $90K to pay off your loan (ie you lost $90 per share so $90 * 1000 = $90K). If you had just made the investment normally, if the $10 a share price did drop all the way to $0, you'd only have lost $10K; the purchase price for those initial shares.

I've never made a short sale before, however... I guess I've always felt that any economy will ultimately increase so in the long term, prices will probably go up. So even though I've lost a lot of money in the last few years were I to actually sell my shares, if I hold on to them long enough, the market should turn around to the point where I'll actually be making a profit.

[hwilliams591]

Now a days a "short sale" has to do with selling of a home for lower than the amount owed or appraised.
Really big with the way the housing market has become.

From what I have read you need to have the house on the market for 30days before attempting a short sale. The mortgage co has to approve the sale and you can not buy another house for 3 - 5 years.

The process can be alot easier if you can find a buyer yourself.

[Graeth]

I have, and it is difficult and plenty of red tape.
Of course that goes with any kind of real estate.