Today I was talking to a fellow that called me to find out about how a Short Sale works. I realized after talking with him for nearly an hour that there are a lot of people (real estate agents) that give out conflicting and incorrect information. I don’t believe that it’s intentional in any way, but scary for the person that needs to be informed correctly regarding this very important subject.
Some of the topics that were of interest and concern to him….
The loan modification he was offered was not going to help him enough per month on his payment and he was going to have to keep all of the principal balance. The payments he was currently making were taking nearly 3/4 of his pay per month. So, he had basically depleted his savings and was now having to look for a new place to rent for a while, but found he was lacking the money it was going to take for deposit and first month’s rent to move…not to mention moving costs.
I assured him that as long as we had the home listed for sale, and it was able to be shown to clients, his lender would not be ask him to leave the home even if he was not making his payments. As I explained, it’s like an ordinary sale in most ways. The main factor in a Short Sale is that the “bank” is really now the seller and as real estate agents now negotiate with the bank instead of him.
For some people, doing as little damage to their credit is very important. So I would say to those of you that fit this category…if your able, stay current on all of your financial obligations. If your like most of us that are facing mortgage payments that are increasing at the speed of light and it’s just not possible to make those payments, don’t. But get your home listed for Short Sale as soon as possible and stay current on as many of your financial obligations as you can.
One last little tip, if you live in a home that has an HOA (Home Owners Association) do what ever you can to not let those get behind. HOA’s hold quite a bit of power, and will slap a lien on the property in a heart beat! And that lien will have to be paid before the sale of the home.
Hope this information is useful, as always, please email us if you have any questions!
