If you are a sci-fi geek- and I know many of you are, you might understand the parallels between Arther Dent from the Hitchhikers Guide to the Galaxy and today’s distressed homeowners. While I do not claim to be the Distressed Homeowner’s Guide to the Short Sale Process, I can get you started with some huge “Do Not”s.
Do It Yourself
Homeowners that don’t seek out a professional are foolish. A professional provides options for homeowners specific to their situation and educates them on the different programs available for them. What kind of profesional? Avoid any “specialist” that charges an upfront fee or guarantees a result. A lawyer, mortgage professional or Realtor skilled and experienced in short sales is a good place to start.
I also call this “Pulling Ostrich”. Facing financial hardship is incredibly difficult and it is far easier to close your eyes and hope for a miracle. However, every week those lotto numbers do not hit, is one week closer to foreclosure and a complete loss of options. Financial hardship is a little bit like cancer- if you catch it and treat it early enough, your chances for survival are much better.
I’ll Get Around to It
Procrastination is almost worse than denial. A procrastinator knows they are in trouble, knows they should do something, but assumes there is enough time to do something tomorrow. The end result is the same- foreclosure and a complete loss of options, but the stress level is far higher then straight up denial.
Not Considering A Short Sale
The myths and misinformation around short sales is truly astonishing. Whatever reasons you have for not trying a short sale, they are probably wrong. A foreclosure is the most damaging event your credit status can encounter – worse than bankruptcy. By avoiding foreclosure, you will likely be able to resume normal borrowing (car loans, credit cards, consumer goods and such) relatively quickly.
Pride over Practical
You are a proactive type. You are facing your problems square on and you are going to attempt a short sale. The number one mistake I see is wanting to save your pride and listing the home too high. Unless you have a small hope of selling high enough to pay off all your loans, there is no reason for this! You are simply prolonging a difficult process.