Short Sales of Convenience?

Dale, we have grown tired of our home being on the market for so long. 

We know, you told us in your thorough listing presentation we owed more on our mortgage than our 7 year old custom built 3400+ square foot home could possibly sell for in today's market.   So, here is what we plan to do.  We're going to stop paying our mortgage so you can discount the price drastically and short-sale this home. 

Yes, this is the real deal.  I have long term Valued Clients who made this decision back in September, 2011.  Just a couple of days ago they called to say they've gotten the letter from their Lender confirming the foreclosure process has started.  They are presently submitting their hardship documents to their Lender.  Although, this story has the appearance of a short-sale of convenience, they do have a circumstance in their present finances to support the justification of a short-sale. 

The sad part of this story is these are long-term Valued Clients.  I have sold two of their previous homes in the past.  They have maintained their excellent credit rating until now.  Plus, they have just gotten a letter from another creditor informing them their credit rating has been down-graded as a result of their short-sale plan of action.  I prepared them all of this would happen. 

To calm their fears I remind them to contact me when fear overwhelms them.  We also have an agreement for me to reduce the list price $1k every 2 weeks until we procure a buyer. 

For many Realtors in the Chicagoland marketplace this is a very familiar story.  Judging from what Mike has shared below on the risk involved in short-sales of convenience, Realtors all over our Great Nation can probably relate. 

The one thing I can say has become another new normal since 2007, is spending a much longer period of time serving my Valued Clients.  In fact, another of my short-sales is moving towards 3rd year anniversary now.  The Lender has countered 4 Buyers over the last 2 years, who just walk-away.  This Lender made the first Buyer wait 6 months for a response, who just gave up.  Sometimes I feel I need an advocate to get me through listening to all of my Valued Client's worries.  Numerous times I have told couples to just cling to one another in these troubling times.  I've told them their unity will get them through this.  Nothing can defeat a united team! 

What makes Mike's comments worth reading is he shares what our Valued Clients can expect months after the completion of a short-sale.  His comments, a very informative read because we're reminded how we must be even more thorough in preparing our Valued Clients for the reality of the road they're about to travel.  Great tool to use when our Valued Client's are making emotional decisions because they're not willing to endure. 

Specifically, as they make plans to purchase in the future.  He remind us of how vital it is to require them to consult with a Loan Officer we know and trust, so we know the truth about their ability to close a transaction before we submit an offer.  Unfortunately, this is the new normal requiring our adjustment to protect our not wasting time, which ultimately affects our own financial stability!  Thanks Mike for a much needed communication!