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.
Myth #2 - You must be behind on your mortgage to negotiate a short sale
While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency. If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.
Myth #3 - There is not enough time to negotiate a short sale before my foreclosure
This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes. The foreclosing party can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand the foreclosures and short sales, there is time available until the foreclosure process is complete.
Myth #4 - Listing my home as a short sale is an embarrassment
It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of ten homeowners in the U.S. are in the same situation. This represents tens of thousands of homeowners who are seeking solutions to their mortgage problems. While it is common for homeowners in this situation to feel like they are completely alone, nothing could be further from the truth.
Myth #5 Short sales are impossible and never get approved
This is a complete falsehood. Are short sales more difficult to execute than a traditional home sale? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not. For example, agents with the Certified Distressed Property Expert (CDPE) Designation receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.
Myth #6 - Buyers are not interested in short sale properties
This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales. For buyers, short sales and foreclosures have become synonymous with "good deals." More specifically, international buyers are targeting these properties. Listing with an experienced agent who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.
I am here to answer your questions!
As a Certified Distress Property Expert (CDPE), I make it my business to know all of the ins and outs of the options that are available for people who are in danger of losing their homes and to help them separate myth from reality. Contact me by either calling the number above or by filling out the contact form below.