It’s tough out there, everybody knows that. Your house may not be worth even half what you paid for it, and you’re having trouble keeping up with the payments. It could be your situation is so dire as to boil down to two choices: Let the bank foreclose on you or try to do a short sale.
What’s a short sale? If you could sell your home for what it’s worth today, you would probably have to come “short” to the closing table: The amount of money you could bring back to your lender from the proceeds of the sale would be less than you owe.
Are banks willing to do this? Yes, in principle. The bank reasons that it can get more money for a home that is still being cared for, as compared to yet another vacant lender-owned home.
What about you? Is a short sale to your advantage? Here’s your bottom line in both cases: Zero dollars and zero cents. That’s how much you’ll receive when your house sells.
So why should you prefer a short sale to a foreclosure?
For one very simple thing, because it’s the more responsible thing to do. You can’t pay your mortgage, and that’s a tragic turn of events. But by helping the bank effect a short sale, you’re doing what you still can to honor your obligations.
Even more important, a successful short sale can be less damaging to your credit than a foreclosure. You’re going to take a hit on your credit rating, either way. But the worst consequences of a short sale could be over in two or three years, where a foreclosure may wreck your credit for five years — or even longer.
On balance, a short sale is probably the better idea. Here’s the next question: Does it make any difference to you which Realtor you hire to list your home for sale as a short sale?
Remember that net figure: Zero dollars and zero cents. Since you won’t be getting any money from the sale of your home what difference does it make to you which Realtor sells it?
As it turns out, it makes a lot of difference. For one thing, no short sale is secure until it is closed. There is always the threat that the bank will go ahead and foreclose on you. You need a Realtor who can put matters in motion quickly, so you can complete the short sale before the bank gets tired of waiting for its money.
There’s more. Many Realtors treat short sales like a red-headed step-child — a slap-dash listing effort focused more on adding to their listing inventory, rather than actively selling your home. But the faster your home sells, the more money it is likely to command — which will make your buyer’s offer that much more attractive to the bank.
So what will make your home sell more quickly?
The answer? Marketing.
Where you and your lender see a short sale, your buyer sees a home. And guess what? Your buyer is seeing a lot of really grungy homes. Dirty. Missing appliances. Crowded floor to ceiling with personal possessions. Even though you have no equity in the property, your marketing problem is no different than in a normal equity sale: How do you get buyers to prefer your home over all the others available on the market?
And this is why it matters which Realtor you choose to list your home as a short sale. Your net might be zero dollars and zero cents, but you still have a lot to lose. The faster your home sells, the more money it will command, and the more money your lender stands to get, the more likely they are to approve your short sale.
It’s that simple. Working with a better Realtor — better not just at the mechanics of short sales but also at the mechanics of marketing — will bring you better, faster, happier results.
This is not a joyous event in you life, that’s understood. But working with the right Realtor on your short sale will help you make the best of a bad situation.
Am I blowing my own horn? Oh, you bet! I have advanced designations in short sale negotiation and management, and I’ve developed an extensive praxis for successfully marketing homes. I’ll bring every bit of this expertise to bear in getting your home sold as quickly and as painlessly as possible.
What’s the cost to you? Zip. Nada. Nothing. We typically charge our sellers an up-front retainer from $1,500 to $2,500. But they’ll be seeing cash at the closing table, and, if you go ahead with a short sale, you will not. We’ll take our compensation from the proceeds of the sale at Close of Escrow, and we’ll pay the buyer’s broker as well. You have nothing to lose by choosing a better listing agent — and a lot to gain.
So let’s talk, shall we? Give me a call at 602-369-9275 or email me and we’ll get together to figure out the best short sale strategy for your home.No comments
We know a seller who doesn’t have the budget to spruce up her house to get it ready for market. Though it would be better for her to put a fresh coat of paint on the walls, there are still things she can do for free to help her house sell.
The first thing that every seller should do to help their lister sell the house is box things up. You’re going to have to box up everything once the house sells anyway, so start right now… before you put your house on the market. Go through your closets. What’s in there that you don’t plan to wear for the next three to six months? Pack it up and put it in storage. Take a critical look at the traffic flow in your house. Have you just become accustomed to swerving to avoid that overstuffed chair that sticks out a little too far? Time to downsize. If you can’t afford to rent an inexpensive storage unit until the house sells, store that chair and those boxes of clothes that you plan to fit back into by the holidays in the garage. If you’ve run out of room there, ask your friends and family to help. Maybe one of them would love to lay back in that chair to watch the tube until you need it back again — in your new house. Do you keep the leaf in your dining room table, so you don’t have to bother with it when you have company for dinner? Plan to not have company for dinner until you invite them over to see your new house. Take the leaf out of the table and pare down the number of chairs that are set up around the table to only three or four. If the kids bring home a friend for dinner, give them the TV trays.
Next — and probably most important — clean, clean, clean. Clean as though you were having Martha Stewart over for dinner. Is your bathroom floor so clean that you would sit down and play a game of jacks on it? It should be. Touch the walls of your shower. Are they smooth as glass? If not, here’s an investment you must make: Kaboom! Thirteen dollars for two bottles and add your elbow grease — this is a small enough investment to sell your home in this market. Everything that’s made of glass should shine: windows, mirrors, light fixtures, oven door windows (oh yes, clean that oven, too!), everything that’s glass. All your appliances need to shine. All of your countertops need to shine. You want a light, bright, shiny house. Dust the slats in your window blinds; dust the tops of your ceiling fans; dust every surface that you haven’t already just scrubbed. Make sure your air filter is fresh … and put a new one in every month till the house sells. You haven’t noticed it for years, but the prospective buyers will see the dark build-up that’s accumulated along the edges of the air vents and returns, so clean those, too. Scrub everything that hands have touched and over the years left their mark — light switches, door knobs, drawer pulls. Don’t neglect your floors. Clean them like Christmas is coming. And after you’re done with all this you’ll be able to notice the other areas that need your attention before the photographer comes.
Remember high school? Remember when the photographer scheduled a day to come take pictures of all the underclassmen? The seniors had each already payed a handsome sum for private studio sessions to make sure that would great senior pictures for posterity. But the underclassmen had one chance and a prayer of getting a decent photograph in that year’s yearbook. If you were like me, you paid extra attention to your skin during the weeks leading up to the shots, to make sure your complexion was clear. The night before the photography, you picked out your nicest looking outfit. And the morning of the pictures, if you were a girl anyway, you got up early to make sure your makeup and hair were perfect. Well now — with your house — we’re talking about a six-figure asset. So the morning that the photographer is scheduled to arrive do whatever you can to make your house picture perfect.
Put away the Sunday paper.
Wipe the dishes and put them away — don’t leave them out draining. Clear the reminders from your refrigerator. And — for goodness sakes — don’t leave your prescription bottle sitting out on the counter.
Take your dirty clothes off the bed and make it! This includes putting a cover on the bed that’s at least long enough that the bed skirt’s slip isn’t showing. (Do I need to mention picking the garbage and more dirty clothes up off the floor?)
And please put the toilet seat down!
But there’s more you can do. Set the table as though you were expecting guests. Make up the bed so it looks like a display in the Neiman Marcus Bed & Bath Department. Put out a vase or two of cut flowers. Fill a glass bowl with fresh fruit.
I recently staged a home for sale, which had previously been listed but not staged. Pictures from the earlier listings were well taken… but just look at what a big difference little touches can make.
One final tip. Look at the photos your agent uses when the listing goes into the MLS. Be very particular.
This photo was used on MLS with the caption, “Master Bedroom.” Is this the image you want prospective buyers to have of your master bedroom? If this is the image that’s being presented, then expect yours to be one of the tens of thousands of houses on the market today that are not selling.