Are you considering a short sale in the very near future? Short Sales are complicated. They are not what the words suggest. A short sale can take months or even more than a year. It all depends on how many liens are on the home and how much your mortgage company is willing to work with you. Short Sales are not for everyone. Click here for more resources. I have been doing short sales for years, and speaking from experience, the larger the bank, the more difficult they can be.
Things to consider
- First, do you have somewhere to move to that will be less expensive on your budget? Can you move in with family? Before you consider a short sale you must know that you have another safe place to live.
- Second, do you have more bills going out than coming in? It’s quite possible today, especially if you are unemployed and have not received any benefits from the state/federal government. Florida’s unemployment system is very fallible at this time and a very small percentage have received help.
- Third, do you have more than one mortgage? Do you have multiple liens against the property? If you answered no to these questions, it is possible that your bank would consider a deed-in-lieu. This is where you just move out and your bank takes the keys. They will report that they took back the house to the credit bureau, but typically you will receive a letter forgiving you of any debt. You will not be able to buy another home for many years. However, this option is one of the easiest after completing the paperwork.
Additional things to consider
- Fourth, if you do have multiple liens or loans against the property, seek legal counsel. Real Estate agents are not attorneys. However, some agents are very skilled and knowledgeable when working with short sales. Again, where you go for advice is up to you and what your bank account looks like. Some attorneys want a retainer upfront and then they charge your bank legal fees to process the short sale.
- Fifth, choose a Realtor or attorney that has experience. Be willing to be very proactive in their requests and help them to the best of your abilities. Realtors essentially only get paid what your mortgage lender is willing to pay them. Unless you have a written agreement with your realtor, payment is not necessary. The way to pay them is by responding quickly.
Sixth, keeping the utilities on, and the house well maintained is necessary. Keeping the utilities on is very important. Banks will need to get an appraisal. The buyer will also need to do their inspections once a contract has been signed. Pools must be maintained. In Florida, it can quickly get hot in a closed home with no circulation. As well, mold and mildew can also form in a closed home.
More things to consider
- Seventh, it is important to maintain a good working communication line. Even if you have moved, it is essential that we can still communicate and get to the required information, quickly. During the short sale process, it may seem unfair, but when your mortgage company wants information, they want it in 24 hours. You, on the other hand, have been waiting for weeks for some kind of response. Unfortunately, that’s the way banks work.
- Eighth, has your mortgagor already begun the foreclosure procedure on your home? If so, the person you hire to do your short sale must be notified. Your mortgagor will NOT stop the foreclosure proceedings. Your mortgagor will need to complete their assessment of the property first. Then they will have to determine if a short sale is in everyone’s best interest, especially theirs. The courts will still continue the case until such time as your mortgagor halts the proceedings. Mortgage companies will maintain communication with the courts and start the proceedings up again if your contract falls through at any time.
As you can read, short sales have multiple considerations. I have touched on some of the most important. There are still many others depending on each homeowner’s issues. Some short sales can go smoothly and simply while others can get super complicated. My longest one took two years, but it was a great accomplishment for me. I learned a lot about how the system works. Of course, banks have made improvements over the years. Keep in mind, banks really do not want to do a short sale. But if they think the results will be more advantageous to their financial gain, then banks will work with you.
I am hopeful this blog will be useful to whoever needs it. Click here to read my previous blog about options to consider if you are falling behind in your mortgage payments. If you need help and you are in Central Florida, please reach out and talk to me. Even if I am not your best fit, I can surely answer your questions and get you on the right track to a successful short sale.