"Do I have to be Behind on my Mortgage payments for a Short Sale?"

Real Estate Agent with Keller Williams Jacksonville Realty

Do I have to be Behind on my payments for a Short Sale?

That's the Million Dollar question these days. MANY people think they HAVE to miss 2-3 months payments in order to be considered for a Short Sale. Well....yes, that was the case a year or so ago. Infact, awhile back, when you called your bank, that's what the person on the other end of the phone TOLD you to do. BUt in the SHort Sale world...things are changing Everyday!?

Again, it ALL depends on your bank! You need to prove a definite HARDSHIP (loss of job, loss in salary, relocation for a new job, health issues, and upside down in your home), the bank is not willing to lose money, just because you want to buy a larger home for less money with a better interest rate. (THAT'S called a Stratigic Short Sale....meaning you go ahead and buy another home before your credit is bad, then just  stop making payments on your old home- and ask for a short sale, because you can't afford to make both payments!? BANKS DON"T LIKE THAT- they aren't stupid)  IF you can foresee  that you eventually will not have the funds to continue to make your payments, (and your financial worksheet shows that), they will consider a short sale...again, it all depends on your lender.

I've just closed a couple  short sales with the seller being current on their mortgage and they were successful short sales. SOMETIMES the bank will ask you to come to the table at closing with money ($3-10,000?!?!) If you show that you DO have a large amount of money in savings, etc, That's a small price to pay, to be forgiven $100,000-200,000 of your debt! You may even be able to  pay if off in a period of time, with no interest. Every bank is different!

  Your credit will only be dinged 50-100 points if you stay current, compared to missing 2-3+ months of mortgage payments, where it could go down 200+ points.

CALL a Realtor that is Educated about Short Sales. I have a database of Realtors Nationwide, if you need a Good Referral Agent in your area. I am a designated CDPE Realtor (Certified Distressed Property Expert).

Jeannette KOhlhaas - Keller WIlliams Realty JAX


"A Straight Shot to a Successful Closing!"

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Comments (6)

Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

It's all open for negotiations.  You never know what they'll consider.

Oct 09, 2010 01:14 AM
Barbara Hensley
RE/MAX Properties - Rockwall, TX
Homes for Sale in Rockwall County, Texas

The key factor I see here is "that the short sale market is changing almost daily".  I see almost every short sale being different than the one I did before.  Good post.

Oct 09, 2010 01:14 AM
Marcia Kramarz
Re/Max Executive Realty - Medway, MA

Hey Janet - I ran into that a year or so ago and my take-away was that it did depend on the bank - More surprisingly in this blog is that a bank would only requre a 3-10k brought to close if you "have a large amount in savings" Now that's something I haven't experienced... If a client has a large amt in savings, it's been my experience the bank wouldn't consider the short sale - no?

Oct 09, 2010 01:16 AM
Carol Letcher
Desert Properties Realty - Chandler, AZ

I agree, I've been able to get short sales done without the borrower missing a payment, BUT I do advise the client to have an attorney negotiate the sale, they will have much better luck..Also some banks are MUCH easier to work with on these than others...HSBC for example..they usually do not require any financials from the borrrower, Wachovia has a liason locally in the Phoenix market that reviews the short sale on site with the homeowner. But I agree, things are changing daily and what they may have approved 6 months ago may not be something that they will approve now.Being a CDPE I always recommend they meet with a tax professional and or attorney!


Oct 09, 2010 01:24 AM
Stella Barbour
NoVa Brokers LLC - Vienna, VA
Principal Broker, Serving Virginia and Maryland

Negotiators tell me that they have to be behind on their payment.  Others don't even ask.  I think it depends on who you get on the phone that day. 

Oct 09, 2010 01:34 AM
Jeannette Kohlhaas
Keller Williams Jacksonville Realty - Jacksonville, FL

We all agree. The one thing that doesn't change in short sales, and will ALWAYS be true is.....

"the rules can change at any time!"

Macia, I had a transaction with a Dr. and of course it all depends on the situation and how much is owed, but the first agreed and the 2nd is the one they let him pay a certain $ amount to agree to the short sale.


Oct 10, 2010 03:09 AM