There are many perceptions and myths about short sales that do not match the reality. The first is that this is an option available only for inexpensive properties owned by sellers with marginal income. The truth is that short sales are widespread across all income brackets and housing stock. There is no typical seller of a short sale. Particularly in today’s economy, many have experienced financial difficulty and a decrease in value of their most important investment; their homes.
Communication is the key to successfully initiating a short sale. A seller should contact his or her lender and a Realtor who can advocate on his or her behalf. A lack of communication can lead to foreclosure instead of a short sale.
Another myth that discourages sellers from pursuing a short sale is a belief that the home must be sold for an amount that corresponds to what is owed on the property. Some homeowners simply believe they owe too much to qualify for a short sale. The truth is the listing price for a home in a short sale situation is generally a percentage of the home’s current market value and is not based on your loan amount.
Many homeowners also mistakenly believe that mortgage payments must be missed in order to qualify for a short sale. This is not necessarily true, particularly in today’s economy. Lenders consider financial hardship and a home’s depreciating value in determining whether a homeowner is eligible. Missed payments used to be a prerequisite to qualify but banks have taken a different approach today. Allowing homeowners whose financial circumstances have changed to begin the home selling process heads off much of the worry and stress that used to accompany the pre-foreclosure process. Remember, it is also beneficial to the banks to avoid foreclosure. This is more likely to happen if homeowners can take proactive steps before payments are missed.
Do you have questions about your eligibility for a short sale? Fill out the contact form to receive a confidential consultation about short sales and if you may be a good candidate for a short sale