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.
