SHORT SALES SNAPSHOT
Short sales are very common in this market and economy. The fact is there are probably some on the street that you live on. In the easiest terms possible a short sale is when you ask the lender to accept less than what is owed on your property in order to successfully sell it.
Why will the bank accept a short sale?
There are many reasons that a bank will accept a short sale.
I can assure you none of the reasons are to help the customer out or to be Mr. Nice Guy. They will accept a short sale for many reasons, and to just name a few:
- They can generally receive a higher net value in a short sale
- They do not have hefty attorney fees like in a foreclosure
- They do not have to be concerned about added expenses and loss from vandalism of a vacant home.
- They won't have an expense for property management, utilities, landscaping care, condition of the property, or the overall expense of maintaining the property.
- There are government incentives for the lenders to successfully close short sales.
So what is the starting point for a short sale?
There are four main steps to a short sale.
The first step is to seek legal advice! There are many companies around that state that they are capable of doing a short sale for you from the beginning to the end. The majority of these companies do not have legal help to look at every case, as every case is different.
The second step is to get a realtor that understands the short sale process. Many companies have realtors that try to do the listing, negotiations, and give the recommendations all on their own.
Some Realtors have teams that handle negotiations with the lender, listing agents that market the
property and a staff to insure that all of your needs are taken care of.
The third step is to get an offer on the house and let the negotiations with the bank begin. This can be a time consuming step as every lender has their own guidelines and stipulations. It is in this step that the short sale approval is given and terms of the short sale are laid out.
The fourth step is to make an educated decision on whether or not to accept the terms of the short sale agreement with the bank. Once again this is a very important step in the process and legal advice is highly recommended to protect your future.
Important Questions to Ask before Signing with Anybody!
- How many Short Sales have they done?
- What is their Success Rate?
- Will they give you Legal Advise and consequences?
- Will they give you the Tax Advise and consequences?
- How often will you be contacted during the process?