Short Sales

To short something is generally to say that you think it will decrease (or has) decreased in value. I feel like the most common way that I've heard it is when a hedge fund decided they want to short a company and makes money when the company's stock decreases.

In real estate, a short sale is the stage between sale and foreclosure. For instance Mr. Smith buys a condo and takes out a loan of $1mm from Chase. Howeve, aftet paying off $100k, if he knows he can't make those payments, he'll have to sell his apartment. But in today'd market, there's no guarantee that you'll sell. And say Mr. Smith's already a couple months behind on his mortgage payments and Chase is pushing him towards foreclosure. Mr. Smith can opt to try to short his condo. This way, he'll try to sell his place at 70 cents to the dollar and sell his place for $700k. He'll then present this to Chase. Chase can either accept the new buyer at $700k, wait for a better offer, or they have a chance of no one buying, in which case they'll never see the rest of the $900k that Mr. Smith still owes.

At the Beacon, I've seen at least two units on short sale. I've put a bid in for a 1 bdrm unit. Short sales take a while to get accepted since it has to go through a bank. The realtor has told me to expect a 1 - 1 1/2 month waiting period. It's been about 2 weeks. So I guess I have about another month to wait?