The 7 Most Dangerous Short Sale Myths - Myth #1

By
Managing Real Estate Broker with Alta Realty Company, LLC RB 21961

A short sale can be an excellent solution for homeowners who must sell and owe more on

their homes than they are worth. Unfortunately, a number of myths about short sales have

developed, and it is important to understand the reality of this process should you find it

meets your current needs.


Myth #1 - The Bank Would Rather Foreclose than Bother with a Short Sale

This is one of the most common misconceptions. The reality is that banks do not want

to foreclose on your property because the foreclosure process is incredibly costly.

Banks, investors, and even the federal government have all publicly stated that if a

person is qualified for a short sale, the deal needs to be considered. Overwhelmingly,

banks receive more on their investment through a short sale than a foreclosure.

The qualifications for a short sale include:

1. Financial Hardship - There is a situation causing you to have trouble affording

your mortgage.

2. Monthly Income Shortfall - "You have more month than money." A lender will

want to see that you cannot afford, or soon will not be able to afford your

mortgage.

3. Insolvency - The lender will want to see that you do not have significant liquid

assets that would allow you to pay down your mortgage.

 

In case you hadn't guessed this will be a 7 part series. Stay tuned for part 2 coming soon to a blog near you!

If you are in financial distress, help is just a phone call away.

Donn Rasch
Real Estate Broker
CDPE (Certified Distressed Property Expert)
RE/MAX Equity Group, Inc.
9200 SE Sunnybrook Blvd., Suite 100
Clackamas, Oregon 97015
503-658-5000
http://www.equitygroup.com/drasch
Donn's Real Estate Blog
Clackamas River Front Home Tour Link

 Myths courtesy of the CDPE orginization.

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Rainmaker
695,912
Dan Edward Phillips
Dan Edward Phillips, Humboldt and Del Norte Counties, CA - Eureka, CA
Humboldt and Del Norte Counties, CA

Great post and a good start on the series!  Thank you!

Jun 23, 2010 05:22 PM #1
Rainer
90,077
Wade Kawahara
Dominion Real Estate Partners, LLC - Phoenix, AZ

I can't wait for post #2.

Jun 23, 2010 06:06 PM #2
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Excellent and to the point.  Somehow there's this idea out there that the banks want to foreclose.  On one of my short sale listings, right after we got our offer in, the foreclosure department of my sellers' lender postponed the trustee sale.  If they had wanted to foreclose, they would have.

Jun 23, 2010 09:07 PM #3
Ambassador
1,999,665
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Are these the same series as the ones offered for CDPE members? 

Jun 23, 2010 10:37 PM #4
Rainer
71,133
Donn Rasch
Alta Realty Company, LLC - Hawi, HI

Dan - Your welcome!

Wade - #2 will be out today.

Pamela - I think it is up to us, as professionals to get the word out, that there is help available. Brokers with the specialized distressed property training are in the position to turn this flood of foreclosures around. Financially distressed homeowners need our help, I truly believe we can make a difference!

Fernando - Yes, this is part of the special report series for CDPE's to distribute to distressed homeowners.

Jun 24, 2010 03:57 AM #5
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Rainer
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Donn Rasch

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