It wasn’t long ago that Las Vegas was going to experience a phenomenon coined as the “Manhattanization” of Las Vegas. Approximately fifty high rise towers were planned, but in the end only around 12 were ever built. There are many owners of these buildings who own units that they now cannot afford, especially given the high monthly association fees.
Due to plummeting Las Vegas real estate prices, many of the owners of high rise condos are now upside down on their mortgages as well. It is a myth that mortgage holding banks will not consider short sales on these investment properties. This is untrue. As long as we have an offer that provides for a better return than a foreclosure, the bank will generally consider a short sale.
Generally, with a short sale, a seller must possess a financial hardship (job loss, decreased income, divorce, moving out of the area for work, death of an owner, medical hardship). Now some owners of these owners may not have a classic hardship but are planning to let the property go anyway. Banks may still want to consider a short sale. In this strategic default scenario sellers may not be able to simply walk away without making a cash contribution, but if a settlement can be reached for 10-20% on the outstanding balance for a full release, this can be preferable to many borrowers who don’t want to foreclose and simply want to settle their debts.
If you don’t have classic hardship, a full team of professionals will be needed: tax advice, asset protection attorney, a REALTOR® with short sale experience where the sellers have assets. In our short sale department here at Shelter Realty, we can make recommendations for attorneys and tax preparers to help you get the answers you need to make the right decision on whether to list your condo unit.
Paul Rowe is the managing agent for the short sale division at Shelter Realty Inc. He may be contacted via email: info(at sign)shelterrealty.com or by calling 702-376-7379.