Short Sale Myth Exposed - Temecula Short Sales
There’s been a rumor going around I want to expose the truth that if a homeowner hires a real estate agent and puts their home on the market as “short sale,” that will stop foreclosure.
Sorry to break the bad news. Putting a home on the market as “short sale” will not stop foreclosure. The only way a short sale can avoid foreclosure is if the home is actually sold as “short sale.” This means the homeowner’s lender has to approve short payoff, less than what is owed on the mortgage.
Short sales are paperwork intensive. A homeowner will have to gather more paperwork for a short sale than when they first got their mortgage loan. A lender reviews a homeowner’s, or borrower’s, financials and hardship letter and then will make a decision if they will accept short payoff or not.
Short sales also require a buyer, which means the home has to be available for showings.
Just putting your home on the market as “short sale” will not stop foreclosure.
Homeowners have heard things that they can “hire a REALTOR®” and put their home on the market, and then bail at the last moment. If a short sale seller has accepted a buyer’s contract, received short sale approval by their lender, and escrow is opened, and then bails, they are liable to pay broker/agent commissions. In other words, the listing broker can sue short sale seller for commissions.
I’d rather not spend my time in court. As a REALTOR® I took an oath with my local REALTOR® board.
To paraphrase, a REALTOR® is not to deceive the public. Putting a home on the market knowing the seller has no intention of going through with the short sale is deceiving the public.
Also, all dealings with other agents and REALTORS® are to be honest. If I tell a buyer’s agent that their client will be able to buy my short sale seller’s home subject to lender approval, when I know the homeowners have no intention of going through with the short sale, is dishonest.
REALTORS® are smarter than some like to believe. I’ve been doing this long enough to know when I’m being fooled. Some tell-tale signs a short sale seller is going to bail.
Lie about facts. Cancel appointments. Ignore and not answer calls. Not return voice messages. Not respond to emails. Not return paperwork and/or incomplete paperwork. Pretend they don’t understand. Not make their home available for showings.
An uncooperative short sale seller is cause for cancellation of listing. My time is too valuable to waste when I could be helping a homeowner who truly wants to short sale their home to avoid an inevitable foreclosure.
Pamela Seley, REALTOR®
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