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By: James A. Browning
Short sale transactions can be an excellent choice for homeowners who must sell & who owe more on their homes than their current values. Unfortunately, there are numerous misunderstandings regarding short sales, & it is extremely important to understand the proper procedures & best practices in this process should you choose this path for your homeowners/sellers.
Misunderstanding 1: THE LENDER/BANK WOULD RATHER FORECLOSE THAN CONSIDER A SHORT SALE TRANSACTION.
This is likely the most common misunderstanding. In reality, banks DO NOT want to foreclosure on properties, as the foreclosure process is rather costly and lengthy. Banks, lenders, investors, and even the Federal Government have stated publicly if a homeowner is qualified for a short sale, the transaction needs to be considered, based upon:
Misunderstanding 2: YOU MUST BE LATE ON YOUR MONTHLY PAYMENTS TO BE ELIGIBLE FOR A SHORT SALE.
While this may have been true in the past, today, lenders/banks are interested in verifiable hardships, monthly payment shortfalls, or pending monthly payment shortfalls and insolvency.
If the homeowner meets these requirements, & is unable to afford his mortgage, act immediately. Any delay may limit the homeowner’s options for a short sale transaction.
Misunderstanding 3: IT IS TOO LATE TO NEGOTIATE A SHORT SALE TRANSACTION BEFORE THE FORECLOSURE.
This misunderstanding probably hurts the homeowner the most. Many mortgage holders do not understand that foreclosure is a long process, & there is time to evaluate options & potentially make decisions that could result in a better outcome.
Misunderstanding 4: LISTING A PROPERTY FOR A SHORT SALE IS AN EMBARRASSMENT TO THE HOMEOWNER.
It is quite understandable that homeowners may have reservations about going public regarding their financial distress. Recent predictions, however, indicate that one in eight homeowners in the U.S. is currently behind in their payments.
Misunderstanding 5: SHORT SALE TRANSACTIONS ARE IMPOSSIBLE & NEVER GET APPROVED.
This is inaccurate. Short sales are becoming more streamlined & lenders have become more knowledgeable & willing to work with homeowners to complete these types of transactions. Real estate professionals are also becoming better educated in the short sales process.
For example, Realtors with the “Short Sales Certified” designation have received extensive training in methods to help homeowners in distress and how to successfully process short sale transactions. There are absolutely no guarantees in any distressed situation; however, the short sale transaction process has become more efficient, while timelines for approval have also become much shorter.
Misunderstanding 6: PROSPECTIVE PURCHASERS ARE NOT INTERESTED IN SHORT SALE TRANSACTIONS.
This is a major myth and homeowners hear this frequently, oftentimes causing them to be wary of listing their homes as short sales. This is not accurate. In fact, many real estate professionals receive phone calls/emails from prospective buyers who only want to look at short sales or foreclosures.
In conclusion, brokers/agents who have been awarded the “Short Sale Certification” designation have been trained in all aspects of the short sales process. Banks/lenders have come to expect that real estate professionals who have received this designation are the ones with whom they desire to work with.
Zoom Agents ARE Short Sale Certified. Call us today if you are considering short selling your home at 801-792-5040
Effective immediately for all offers accepted after 10/19/2011 the $100 down payment sales incentive for the Denver HOC has been approved for the next 12 months.
The requirements for the incentives are:
• owner occupant utilizing FHA-insured financing
• offering full current list price
If you have questions, please call me at 801-792-5040 and I can send you a list of eligible foreclosed HUD homes.