Short sales are an option for sellers who want to protect their credit by putting their house on the market before it goes into foreclosure.
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I deal with short sales both as a listing agent and a buyer’s agent, so today I want to cover this topic in full.
A short sale is when the seller attempts to sell the house for less than what they owe on that house. The seller puts the house on the market before it goes into foreclosure because they want to protect their credit.
A short sale has to be approved by the bank. In order for the bank to improve the short sale, they have to take several considerations into account. Can the seller prove hardship? How much do they owe? How many liens do they have? What type of liens? What are the assets?
A successful short sale happens when the seller fully cooperates.
A successful short sale happens when the seller is fully cooperating and can prove hardship. It can get messy when they or their spouses aren’t cooperating, they can’t prove hardship, or there are multiple liens or types of liens. For those reasons, a short sale can take at least six months or more. Buyers need to be patient and flexible on the closing date, then, because it’s really a roll of the dice as to whether they get that house.
The most important thing the buyer’s agent can do in this transaction is ask the seller’s agent the right kinds of questions. Is the seller cooperating? Have they filled out the short sale package and sent it to the bank? Do they have a good case? What to they owe in total? Has the bank done a BPO (broker’s price opinion) yet?
The general rule of thumb is that sellers are usually willing to lose 30% on their investment, but you always put an offer in anyway because you never know if they’re willing to lose more. The key is to have a buyer’s agent that’s on top of the seller’s agent because, quite frankly, they don’t always have all the answers.
The most important thing the listing agent can do in this transaction is move that process forward and keep close communication with buyers who have expressed interest.
If you or anyone you know is looking to do a possible short sale, please let me know and I’d be happy to offer a free consultation. If you have any other questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you!
