I've been blogging a lot about short sales lately. It seems everywhere I turn I am meeting people who have lost a job, fell ill or just can't afford their home anymore. Everyone has an opinion about why we are in this situation. It's the lenders fault. It's the homeowners fault. It's the Feds fault. Regardless of how we got here - there is work to be done to fix it.
I processed my first short sale over 2 years ago. Like many agents, I stumbled through the process. Anyone who knows me will tell you I don't give up easily. Once I set my mind to doing something - it gets done. While it was probably one of the harder sales I ever completed - it didn't scare me that much. Truth is - I liked the challenge. And I was good at it. So over the years, I have continued to look for homeowners in a short sale situation.
So why do banks do short sales? Banks are looking to minimize their losses. Foreclosure costs the bank a lot of time and money. Court costs, attorney fees, etc. Then - once they have the property they have utility costs, liens to pay off, repairs, sales commissions, etc. And with a downard trending market - the property may be worth less by the time they foreclose.
If you are in a situation where you owe more than your home is worth - there is hope. Banks will let you sell your house for less than you owe. And in many situations - they will forgive the difference or "deficiency" between what you sell it for and what you owe on your mortgage. But you need to make sure you partner with someone familar with the process. Banks want everything in a tidy package -according to their needs, not yours. Think of it as an obstacle course. Lenders are overwhelmed with the huge number of potential short sales hitting their desks. It can often take weeks, even months to get a short sale approved by a lender.
My goal is to make things easy for the bank. That's right. I'm going to make everything easy for the bank that is trying to foreclose on your home! I'm going to make sure all those forms they want are completed. I'm going to make sure I send them everything before we even have a deal on the table. And I'm going to bring them a deal that will close. Why? Because It's the best way to make sure we sell your home and you avoid foreclosure.
For buyers, short sales offer a tremendous opportunity to purchase real estate at a discounted rate. But it can mean waiting long periods of time not knowing if the deal will go through. These homes are also usually in better shape than bank owned foreclosures. Homeowners are still living there and taking care of their house. Working with someone who knows how the process works will help you find a good home at a great deal.
Earlier this week, a reporter from the Chicago Tribune found my blog on the Internet and interviewed me for a story on short sales. Read the Chicago Tribune story - Break For Sellers: Banks Settle for Less