The lack of correct information can be daunting for a homeowner facing the difficult decision of selling their home when they owe more than it’s worth. Which is why we created this website. We wanted to help answer questions that you or someone you know may have regarding a short sale. Understanding in depth information on the short sale process… and… how you can give yourself the best odds of getting to the settlement/closing table.
So, below are some myths about Short Sales.
Myth 1- “I must stop making payments before bank will approve a short sale.” You DO NOT have to stop making payments on your home in order for the bank to approve a Short sale. What the bank needs to see is a solid reason as to why you are unable to continue making your monthly payments and /or must sell (loss of job, relocation, divorce, etc.). Due to current market conditions the banks generally understand why the short payoff/sale is being requested, whether you have missed payments or not.
Myth 2- “The bank will not pay the commission for my Real Estate Agent or the costs of listing the property with a real estate agent”. False – A real estate agent commission is taken out of the banks proceeds at close of escrow, as well as all delinquent taxes, HOA dues and closing costs.
Myth 3 – “I have two mortgages…there is no way I can do a Short Sale.” When the short sale process was just beginning, many people did not try a short sale if they had a second mortgage that was going to be negotiated. After the huge wave of foreclosures, 2nd mortgage holders wised up. Now instead of foreclosing on a property and receiving $0, they have started to accept pennies on the dollar…which is better then getting nothing. In situations when the first mortgage is also going to be short sold, the 2nd will usually ask for a low dollar amount from the first mortgage.
Myth 4 – “Short Sales do not get accepted.” At LMS Management, we have close to a 93% approval rating. The reasons short sale typically fall apart is generally due to a unhelpful seller.
Myth 5 – “A Short Sale is embarrassing…a black cloud will be hovering over our house.” A Short Sale is a regular sale! There is nothing different in the way that you as a seller prepare to sell your home, or as our do to agents list and market your home. Short Sales happen to people with good jobs making good money. It simply is a situation where you must sell and do not have the means to make up the difference. You should never feel or be made to feel embarrassed about the situation. Furthermore, a Short Sale will not negatively effect your credit like a Foreclosure, and your debt will show on file as “Paid as Negotiated” or “As Agreed”.
Myth 6 – “Any agent can list a short sale.” It’s amazing that agents list short sales for clients in trouble to learn on the fly. The fact of the matter is that most agents do not have a system or plan in place to list a short sale. When working with LMS Management you will get a team of Debt Negotiators, Real Estate Agents and Title Companies that are are seasoned veterans in how to handle a short sale. The last thing you want is to turn that reigns over to an unproven agent, in what could be the hardest time of your life.