In the month of March of 2010 short sales made up about one third of all sales across the nation. With default rates increasing and more people falling behind on their mortgage payments every day, that will only increase or at least stay fairly steady.
Since they are going to remain a burden on our real estate market, we should spend some time clarifying some facts. Read over the top six short sale myths and learn how to handle your particular situation.
In order for your bank to accept or consider a short sale offer, you must stop paying your mortgage payment. This depends entirely on your bank and their responsiveness. Many lenders are proactive and handle short sale request quickly and others do wait until you have officially defaulted to even start examining the possibilities. The best way to facilitate a short sale is for the homeowner to badger the bank on a regular basis, at least two times a week. They will ignore the listing agent but will not ignore the homeowner as easily. How do I avoid the embarrassment of listing my home as a short sale? Many homeowners are in the very public situation of having the bank publish public notices about how you are not meeting your obligations to them. Some people are unnerved by this, but they should not be. Being proactive and contacting your bank before you stop paying them is one way to prevent the entire city knowing your situation. Buyers are not as motivated to buy a short sale with all of the bank owned property on the market. Since buyers are only dealing with a single lender whenever they purchase an REO property, the misconception is that it will go faster and smoother. Not only can short sale purchases be fast but they are getting faster as bank become more accustomed to doing them. There is not enough time to do the required negotiations. This is completely false, no matter the point in the process you find yourself. In fact, it is actually better if you are closer to your foreclosure date to try to get a short sale completed. Buyers have time to wait a month or so, but may not be as willing to wait six months for your bank to make up their minds. Banks seem to prefer to foreclose than entertain a short sale offer. Recent changes in the law from Freddie Mac and Fannie Mae have made foreclosure much more costly for lenders, so they are more open now than ever before. Not to mention that banks actually accept maintenance liability, as well as other forms of liability after they foreclose that they avoid by accepting them. Short sales are the most difficult way to sell your property. Although this may be true, they are not difficult for a real estate professional who has a viable and efficient system in place. Many listing agents in today’s market have a consistent system they use to communicate to banks and make sure they are up on any developments on the files and sales that are before them.
Learning these facts and using them to help channel your efforts and concerns as a homeowner will help you to eliminate worry and do what you need to do, when you need to do it.