Short Sales Are Making a Comeback

Coldwell Banker Realty - Casey Cooke

Short sales were very prevalent during the mortgage meltdown, and I’ve noticed there have been more of them lately. A short sale amounts to a homeowner owing more money on their home than it’s actually worth and they can’t sustain the payments. Selling short means selling the house for less than the loan balance and asking the lender to forgive the unpaid balance, allowing them to walk away and wipe out the outstanding debt. Common candidates for short sales include people who bought a home in the height of the market and paid more than it was worth or got a bad loan like a negative amortization loan or an interest only loan. It could also be a homeowner with health or employment issues that prevent them from making monthly payments. “Lenders will allow short sales when they know the homeowner can’t make the payments.” For short sales, we market the home as usual and do everything we can as Realtors to sell for top market value. We take that offer to the lender and ask them to approve the short sale. Typically, the only reasons a lender will allow this is that they know the homeowner can’t make the payments. Since they probably don’t want to own the home and go through the foreclosure process, they’ll cut to the chase and agree to a short sale. If they approve it, you go through the closing process like any other real estate transaction and the outstanding debt gets wiped out. The commission, closing costs, and escrow fees all come out of the proceeds of the sale and the lender takes what’s left. The homeowner doesn’t pay anything, but they almost never get anything either. It hurts the homeowner’s credit, but a short sale candidate’s credit is already hurt. If you have any questions about short sales or you or someone you know is in this position, my team is well-versed in handling short sales. Just give us a call or send us an email—my team and I would love to speak with you!