What is a short sale?
We get a lot of calls in this market where people are upside down on their house. One of the first questions I get is “what about a short sale?”A short sale is just the bank agreeing to take an offer that is less than the amount owed on the property. The biggest misconception is that they are eager to do this and that its easy to do. Usually not the case.
Think about it, if someone owed you money and said they wanted to pay you less than they owe, how would you react? You have to make a plain case that this is in the best interest of the bank or it isnt going to happen.
First off, the bank is going to look at your ability to repay the loan before agreeing to take a loss. They generally wont discount the property if you have a strong ability to pay them back without selling the house.
Second, they will look at the value of the property to make sure the offer they are accepting is in line with what they could possibly net if they took the time, trouble and expense to foreclose and sell it themselves. This amount is significantly less than retail, but not as steep of a discount as many seem to think.
Selling on a short sale is definitely a viable option, but it can be a royal pain dealing with the banks, it messes up your credit, and you can spend many months working on one and get a “no”. I’ve seen them take as long as two years, but the banks are streamlining the process. The average these days is more like 4-6 months.
There are no real guidelines in short sales, its just banks using common sense to take a small loss now rather than a larger loss later. Keep in mind that getting a bank to us common sense is about as easy as getting the government to.
There are other, lesser known approaches to selling property if its upside down, we’ll cover some of those in future blog posts.
If you’ve got a house in trouble and want to know your options, Cash2Seller Home Buyers is always here to discuss your situation in a no hassle, friendly, VERY straightforward way. Call us today at 571-327-8072