I’ve been reading a lot of blog posts and e-mails about short sales. There are plenty of information out there on how to buy short sales, sell your home as a short sale and, my current favorite, all the different types of fraud involving short sales.
But what about the people? For the home seller, going through a short sale is an emotionally draining experience. The worst part is the public exposure. For the home buyer, the experience is frustrating- is it a real sale or isn’t it?
I have some thoughts that I hope will help both buyer and seller.
For the Seller:
- It is ok. The buyer is far too worried about their home buying decision to think about you and what led to your home being short sold.
- Choose a marketing plan that limits your time and exposure on the market and ask your Realtor to remove the “for sale” sign as soon as you’ve accepted an offer. Your neighbors will soon forget your home was ever on the market.
- Get the documents need for a short sale in order, right away. Make sure you keep a copy in case the originals are lost.
- Be prepared for constant repetition. Banks will ask and re-ask for documentation and letters of explanation.
For the Buyer:
- Not all homes advertised as a Short Sale are actually for sale. Fraud is extremely common and these homes are not intended for public bid.
- It is an unfortunate truth that the “professionals” involved are part of the fraud problem. The junior mortgage holders, the listing agent and the seller might ask for cash payments outside of the escrow. THIS IS ILLEGAL and all who participate can be prosecuted. The only way this is legal is if the payments are disclosed, in writing, to the first mortgage holder.
- Short sales are not short. It often takes months to seek approval and there is no way to measure progress during that time. This limbo is very hard if you love the home.
- Buyers always assume they will easily walk away if it takes too long or they find another home. Legally, this is completely true. However, experience shows me that, emotionally, it is harder to do than most would think.
- Banks can, and often will, re-negotiate the deal after months of processing. Be prepared.
A short sale can truly be a “good” thing for both buyer and seller. For the seller it is a chance to close this chapter and move on with your life, sooner, rather than later. If you can focus on this, the process will be more bearable. For the buyer, a short sale should be enough of a discount to warrant the drawn out process. This is an obvious win and, focusing on that will make the process more bearable.