What on earth is a “Short Sale?”

A Short Sale is when a lender agrees to accept a payoff on a home mortgage that is less than what the owner of the property actually owes on the mortgage.   If your bank agrees to a short sale, you then hire an agent to find a buyer for the house, and then sell the house for a loss, and with the bank’s blessing, they agree to eat the loss.  Usually the lender will not disclose the amount they will accept as payoff, but they will consider reasonable offers lower than the principle balance owed.  That’s the really short version of how it all works.

Do I need a Realtor for a Short Sale?

Yes.  Banks will only negotiate a short sale with investors or Realtors. Lenders find it difficult to work directly with the homeowner because they are already “on the hook” for the amount they owe.  Why negotiate when they don’t have to!  Also, short sales can be difficult and are definitely time consuming.  They require a lot of negotiating skills as well as patience, your Realtor will handle things every step of the way.
The bank and your Realtor negotiate commissions (which are always at a reduced rate), so this is something the homeowner need not be concerned with and frankly, they have no control over.

Why is a Short Sale good for a Seller?

As a seller if you are able to complete a Short Sale on your home before it forecloses, you will have saved yourself an enormous hit on your credit  that can last seven years. You will also be able to rebuild your credit from those late mortgage payments much faster then you would if a foreclosure was on your credit.

Why is a Short Sale good for a buyer or investor?

First, you have a good chance of saving thousands as a home buyer because the home needs to sell before the foreclosure begins. This typically means the home is listed well below market and offers that are lower have a good chance of being seriously considered by the lender.

Second, usually those in a Short Sale situation are working with the lender to make things right (or as right as possible) and care about their credit, so the chance of the home needing major repairs is less likely.  When buying a short sale, be aware the process can typically take 2 to 3 months to close, buyers and investors must be patient, it will pay off in the end!

Why do lenders ever allow Short Sales? 

Short Sales can be beneficial to a lender because they do not have to go through the expense, legalities, and time of a foreclosure. They also stand to make more money on the loan than they would in a foreclosure. They also avoid owning a home that they now have to sell.

Does Terri Marotto-Krzyzyk List and Sell Short Sales?

You bet! Please contact me anytime with your questions about listing a short sale property or purchasing one.  I am happy to answer your questions and guide you through the process.  I am working with several Short Sale Centers to negotiate on your behalf.