Myths About Short Sales

By
Real Estate Broker/Owner with Century 21 Four Seasons Realty

It's unfortunate for any homeowner to be in a situation where they owe more than the home is worth today and they must sell because of a financial hardship. For some, the only options become foreclosure or a short sale. Their has been a myth that a foreclosure is better for the seller of a home because they can "walk away". In reality most lenders have up to 7 years to claim on deficiency judgement against the seller after the foreclosure has taken place.

Table & ChairsMany myths have evolved over time, but understanding the reality is a way to help yourself. Seven short sale myths are:

  1. Short sales are impossible and never get approved. It is true that short sales are more difficult but they are not impossible. A Certified Distressed Property Expert has extensive training to help homeowners in distress. Here at Century 21 Four Seasons Realty we have several CDPE acredited agents.
  2. Banks Don't Accept Short Sales. In reality, banks are doing whatever they can to avoid a foreclosure.
  3. You must be behind on your mortgage to negotiate a short sale. Many lenders today focus on verifiable hardship, monthly cash flow shortfall and insolvency - not just people in default.
  4. Buyers Avoid Short Sales. Many agents report that buyers call them looking for short sales. Short sales are becoming synonymous with a "good deal", specifically with international buyers. In our market, where we have mostly overnight rentals, most homes still have furniture and future rental income to entice potential buyers. Foreclosures have no furniture and must start anew on a rental program to gain future income.
  5. Listing your home as a short sale is embarrassing. Recent estimates state that 1 out of 5 homeowners in the U.S. is in this situation. You are not alone! Also, a short sale appears as a regular listing with a for sale sign. Whereas a foreclosure is taken by the bank and notices must put placed on the home.
  6. Banks prefer to foreclose. Banks do NOT want to foreclose. Banks, investors and the federal government have all publicly stated that if a person qualifies for a short sale, then the deal needs to be considered.
  7. There is not enough time to negotiate a short sale before my foreclosure. Many lenders today will stall a foreclosure up to the final day of the process, with a legitimate contract.

For more information about short sales go to our  website to contact us, we'll be happy to help.

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