Short Sale Myths Debunked
RISMEDIA, May 13, 2010—With short sales making up almost 35% of home sales in March and the country with a national foreclosure problem, I would like to set the record straight on common short sale myths.
1. You must be default on your mortgage to negotiate a short sale. Short sales are not a function of default status on a mortgage. They are the result of the bank mitigating a potential default situation that, in the long run, will cost more money to the investors. We have completed many short sales in instances when the borrower was not in a default situation. Some banks require the borrowers to miss at least one payment but many do not.
2. Listing my home as a short sale is embarrassing. Anytime we get ourselves into a tough financial situation it can cause some embarrassing feelings. It is important to remember that those feelings will not help us get back onto stable financial ground. We need to overcome our feelings and do what is right to protect our financial futures. Short Sale filings have doubled since last year and in most markets, including Northern Virginia, Short Sales and Foreclosures make up 50% of the properties currently listed.
3. Buyers aren't interested in short sale properties. Short Sale properties are often times available at a competitive price to other properties on the market. In many cases, short sale properties are very well cared for and have not had to endure the deferred maintenance of a REO property. Short Sale properties are in great demand in the Northern Virginia marketplace since their is low inventory. There are also a lot of investors out there looking to pick up short sales as investment property.
4. There's not enough time to negotiate a short sale before foreclosure. A good negotiator takes into account the timeline affiliated with a foreclosure. There is always a chance that a short sale can be negotiated. However, the only way to know for sure is to try. Most banks will postpone the foreclosure date once they know the seller is in the process of short selling their home. They definitely postpone the sale date if there is an offer on the property.
5. The bank would rather foreclose than complete a short sale. Banks do not want to foreclose on property. It is expensive and carries a high level of liability once the bank owns that property as an REO. Wherever possible, banks are seeking other loss mitigation options before foreclosure. Foreclosure costs the bank 30% more than a short sale so it is in the banks best interest to do the short sale.
6. Short sales are impossible and never get approved. Short sales are complicated, but not impossible. We negotiate short sale approvals every day.
For more information call Kim Darwaza of RE/MAX Allegiance your Northern Virginia Short Sale Expert and Realtor at 703-856-2254. Kim is a Certified Distressed Property Expert. As a CDPE she is a Northern Virginia Short Sale Expert and assists distressed homeowners in the sale of their homes in order to help them avoid Foreclosure. Kim has successfully helped clients short sell their homes in the greater Northern Virginia areas of Fairfax County, Prince William County, Loudoun County, Arlington and Alexandria. She looks forward to assisting you in making this process as smooth as possible during this difficult time.