SHORT SALE 101: 

"RUMOR vs. REALITY CHECK"

=

Solutions To Help NJ Homeowners Avoid Foreclosure

(March 2009 edition) 

RUMOR:  Let's say a financially distressed homeowner owes a mortgage lender/bank a certain amount of money for a mortgage note, and the bank agrees to allow a SHORT SALE. This means the seller should purposely list their home at a high price since the bank will accept an offer from a buyer for 10%-20% less than what the sellers actually owe the bank, right?

REALITY CHECK:  NO. This is NOT necessarily true! Many lenders understand the general public has "caught wind" to what a SHORT SALE home actually is, and because of that, the rules of engagement are changing. Every mortgage lender is different and is governed by various rules when it comes to what price is acceptable vs. unacceptable. Now don't get me wrong; often times mortgage lenders are willing to "bend" a bit and accept a less than attractive offer from a buyer for a SHORT SALE home.  However, I have had lenders tell me directly "we will let certain homes go to FORECLOSURE before we will just give it away for almost no money in a SHORT SALE." 

They didn't make that statement based on principle, but rather on mathematics.  If a home is listed on the market for sale, and it doesn't yield contract offers high enough to cover the mortgage + the fees to sell the home + any delinquent utilities + delinquent home owners association fees (if applicable), the lender may feel it could be less costly to allow it to be FORECLOSED on. Lenders are often willing to negotiate when it comes to what "sale price" they eventually accept for a SHORT SALE, but a 10%-20% discount to a potential buyer is often NOT accurate when the SHORT SALE home is: #1 priced appropriately for the current market and #2 the home shows well.

SOLUTION = If you're a homeowner who is financially challenged and it seems like you can't figure things out on your own, make sure you speak to your mortgage lender immediately. Be honest with them about your circumstances, and ask them for all possible solutions to help improve your situation.  If they don't offer you any favorable options, then ask them about their specific steps to get you consideration for a SHORT SALE.

After doing your research with them, interview and select a Realtor who understands how the SHORT SALE process works. Be certain the Realtor is upfront with you about where the current prices of homes comparable to yours are. This way you will have realistic expectations about what to expect, and you can price your home appropriately based on current market conditions.  By following these suggestions, you'll be one step closer to attracting a buyer that will write a contract to purchase your home, and even closer to getting your mortgage lender to say SHORT SALE APPROVED!

Here's last month's edition (February) of Short Sales 101:  Rumor vs. Reality Check

Look at this GREAT 3-bedroom + 2.5 bath "BANK APPROVED SHORT SALE" townhouse for sale in Marlboro Township's Point de Jardin community

Luxury homes like this in Manalapan can also offer short sale opportunities

Information courtesy of:

AMBER NOBLE-GARLAND

Short Sale Specialist 
Weichert Realtors (Marlboro ~ Manalapan office)
455 Route 9 South
Manalapan, NJ 07726
917-723-5645 - cell
732-536-4400, ext 199 - office

www.AmberLovesRealEstate.com

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