Yes, folks, contrary to what you might read in the papers, Short Sales are getting done successfully. We have seen a 22% increase in closed short sales in the Conejo Valley since this time last year.
I closed another short sale in Agoura Hills last week, much to the relief of the borrowers and to the utter delight of the new owners. The seller got out from under an impossible loan situation and the buyer purchased a terrific home at about 70% of what the home cost to build just 3 years ago... Short sales are never easy, but they are here to stay for some time to come!
What does the increase in Short Sales mean?
Well, for one thing it means fewer people are going through the anquish of being foreclosed on. The anxiety and demoralization one goes through during a foreclosure is unbelievable. Not only is it devastating to a person's credit, the toll a foreclosure renders on a marriage, the kids, relationships with friends and neighbors, and the effect on the homeowner's sense of personal self-image is immeasurable in this article.
The increase in successful Short Sales is also good for communities because folks stay in their homes longer instead of abandoning them. The yard gets watered and mowed, some maintenance gets done - and usually the neighborhood rallies behind the family who is going through a hard choice but does the right thing. With the new government programs, like HAMP (Home Affordable Modification Program) and HAFA (Home Affordable Foreclosure Alternatives), the tide is turning. Hopefully, foreclosures will soon be a thing of the past in a few years as more lenders embrace the importance of reaching out to homeowners to offer foreclosure alternatives.
The new programs are even allowing borrowers to stay in the home at reduced payments temporarily while they market and sell their home - AND pays them $3000 at the end for moving expenses!
There are several important factors to whether a short sale will be successful:
#1 - The homeowner's cooperation and proactivity in making a "graceful exit" from their homeownership problem is key. Gather your paperwork and talk to your spouse and kids. Get everyone on the same page and set the attitude to positive. Afterall - you're going to work this problem out successfully as a team!
#2 - The agent's skill in executing all the pieces of the Short Sale puzzle is vital. There are dozens of components to a short sale, from communicating with the lender, working closely with escrow to stay within the numbers, marketing the home aggressively, dealing with multiple offers and buyers who might change their minds... The list goes on. Be sure you select an agent who is CERTIFIED in FORECLOSURE ALTERNATIVES, has a track record of successful closed short sales, and has a close relationship with a great escrow company.
#3 - The lender(s) cooperation and accessibility. Many times if there is more than one lender the transaction becomes complicated. Everyone involved has to agree in writing and coordinate payoffs, wires, details and timing. Select an agent who has the systems in place to communicate regularily with your lender(s) and who understands all the ins and outs of coordinating with multiple lenders.
The most important thing to remember is this: If you find yourself in the situation where it's just not feasible to keep your home, for whatever reason, you are not alone. In some communities over 50% of the sales going on are short sales or foreclosures. Don't feel isolated - don't crawl under a rock and pretend it will go away. Be proactive now, before your credit is shot and the stress and anxiety starts to affect your health and personal relationships.
And remember - FAMILY is the most important thing in the world. Home is not the roof over your heads, it's what's in your hearts, folks. Chin up - you can get through this with a little help!
Kathy Smiley Prudential California Realty Certified HAFA Specialist (805) 497-7804
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