Short Sale Myths


ss1A short sale can be an excellent solution for homeowners who must sell and owe more on their homes than they are worth.  Unfortunately, a number of myths about short sales have developed, and it is important to understand the reality of this process.

 

 

Myth #1 – The bank would rahter 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 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.

Myth #2 – An owner must be behind on a 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 and insolvency.

Myth #3 – There is not enough time to negotiate a short sale before my foreclosure

This myth probably hurts homeowners the most.  Many do not realize that foreclosure is a process, and there is time to make decisions that may result in better outcomes.

Myth #4 – Listing my home as a short sale is an embarrassment

According to recent estimates, one out of five homeowners in the U.S. is in this same situation.  You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.

Myth #5 – Short sales are impossible and never get approved

This is a complete falsehood.  Are short sales more difficult to execute?  Yes.  Does a homeowner need to learn about a new process?  Yes.  Are they impossible?  Absolutely not.

Myth #6 – Banks are not accepting short sales

The reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing.  It is preposterous to believe that they would deny a short sale in hopes that some future legislation would pass and pay them for losses.

Myth #7 – Buyers are not interested in short sale propertiesss

Potential sellers hear this but, thankfully, it is not true.  In fact, many agents are getting calls from buyers who say they only want to look at foreclosures and short sales.

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