Short Sales Myths

7 short sale myths 2 Short Sales Myths

7 Untruths of a Short Sale

A short sale can be an excellent solution for a homeowner who owes more on their home than what it is worth and has to sell. The flip-side is that there are a number of myths regarding short sales. It is vital for a homeowner understanding the process in order to determine if this particular solution meets the needs of you and your family.

What follows are seven short sales myths:

 

1) Short sales are impossible and never get approved

Nothing could be further from the truth! While there are no guarantees in any transaction, more and more short sales are being approved monthly.

2) Banks are not accepting short sales; they are waiting on a bailout

Many have heard this, but the reality is that banks (and the government) are trying to do anything they can, within reason, to avoid foreclosing on property.

3) You must be behind on your mortgage in order to negotiate a short sale

While it is true that initially some lenders wanted you to be in default before they were willing to consider a short sale, this trend has almost all together reversed. Today lenders are looking for verifiable hardship, monthly cash flow shortfall or pending shortfall and insolvency.

4) Buyers are not interested in short sales and avoid them

Short sales and foreclosures have become synonymous –not with issues—but with good deals.

5) Listing as a short sale is an embarrassment to the seller

With 40 to 60% of the sales in the US predicted to be short sales or foreclosures, homeowners are not alone.

6) The bank would rather foreclose than bother with a short sale

The reality is that banks do not want to foreclose on property. Short sales make financial sense to lenders.

7) There is not enough time to negotiate a short sale before foreclosure

The foreclosing party can stall a foreclosure up to the final day of the process. These days many lenders will stall with as little as a phone call from homeowners letting them know that they are trying to sell.