Even though they’ve been around forever, short sales are at the forefront of the real estate market along with foreclosures. I’ve found there’s a general misunderstanding about short sales that I’d like to correct.
As listing agents, we have to disclose to selling agents every type of potential hindrance to a closing, especially a short sale. That being said…it’s important to understand there’s essentially two different types of short sales.
The first one, and least common, is a sale on a listing where the seller owes more than the home is worth, but has the ability to bring money to closing to make up the difference. You may wonder why we would need to disclose this type of short sale since there’s no bank involved. Well, let’s say, the seller has the ability to bring funds to closing, but suddenly falls on hard times and blows through his/her emergency funds. The seller can no longer afford to sell the home that way and the buyer would’ve been blindsided by the change or cancellation. What this sale would then hopefully switch to is the second type.
The second type of short sale is the most common one. Since home prices have depreciated in most areas, homeowners owe much more than their home is worth and sometimes have fallen on hard times and have to move. At this point, a real estate agent can swoop in to help the homeowner by facilitating a conversation with the bank/lender, to see if they’re willing to accept a short sale. Once the agent has the go-ahead from the bank, the property can be marketed and sold at a reduced and more marketable price without the seller having to come up with extra cash to close.
You may be thinking, ‘but if I don’t have to pay a real estate agent, I can sell my home for what I need to get out of it.’ Well, but if you’re at a point of hardship, timing can be everything for you. It’s been proven over and again that listing your home with a real estate agent at a recommended price, will snag you a buyer in a much shorter amount of time. And, by now, most all agents have knowledge of how to work a short sale and should be able to knowledgeably direct you through the sale.
One thing’s for sure, short sales are a much better option for the seller’s credit than foreclosure. Sure, they take patience, but doesn’t everything that worth doing?
Happy Friday! Sunny and 46 degrees in our fair city today—-whooohooo!