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7 Deadly Myths about Short Sales

There is a lot of information to be found regarding the short sale process. As real estate professionals, it’s important to navigate through all this information and to weed out the so-called myths and get down to the “nitty-gritty” truth about short sales!

There are a lot of misconceptions about short sales and the short sale lender requirements that go along with it.  We’ve pinpointed the top 7 myths and set them straight for once and for all!

Myth #1:  Lenders do not accept offers that are below fair market value. This is a very common misconception. In many cases, lenders will go as low as 15% below the Broker Price Opinion. Basically, if the lender will net more from the submitted offer versus a foreclosure, they will most likely accept the short sale.

Myth #2: Lenders won’t allow a borrower to do a short sale unless they are current on their mortgage payments. Unfortunately, this is true in a few cases. However, provided that the borrower can show a current or inevitable hardship, causing them to fall behind on their mortgage, the lender will allow a short sale.

Myth #3: Lenders would prefer to foreclose than short sale. As mentioned earlier, if the lender will profit more from a short sale, they will pursue that avenue. It all comes down to money.

Myth #4: Short sales have been given this name because of the length of time it takes to complete one. We should all know by now that this is not the case. Short sales are called that because the lender is accepting less than what is owed on the property.  Short Sales are a process and should be given approximately 90 days to complete.

Myth #5: Short sales are impossible to get approved. Well, this can definitely be true if you don’t know what you are doing. If you are acquainted with lender procedures and the required documents, the short sale process can actually be quite familiar and able to be navigated in an efficient manner. Lenders have had the past few years to work out their kinks and thankfully, we know just what they need!

Myth #6: Buyers are not interested in short sale properties. Thankfully, this is not true. Depending on your market, short sales can account for 30% or more of all properties on the market. They are normally considered “good deals” for buyers. It may take longer than a foreclosure or traditional sale for the buyer but they normally get a very good deal on the price and they also help a short sale seller avoid foreclosure. A good situation for everyone!

Myth #7: There is not enough time to process a short sale because the homeowner received a Notice of Default or a Notice of Sale. Just because a seller has received a Notice of Default or Notice of Sale does not automatically disqualify them for attempting to obtain a short sale approval. The lenders often will postpone the foreclosure sale date as long as they have a full financial package and an offer on the property. It’s important to know the steps required to request the postponement since these requests are generally accepted 3-5 days prior to the actual sale date. If the correct process it not followed, the seller’s home could be in jeopardy of foreclosure due to the incorrect steps being taken.

It is misconceptions like these that can cause a family home to go to foreclosure or cause a real estate agent to miss an opportunity to help someone in need. It’s important for our real estate community to stay educated so that we may all remain effective in the current real estate market and help as many distressed homeowners as we can. This way, we can share more success stories and drown out all of the negative publicity surrounding short sales.

At Short Sale Experts INC, we can help you navigate through the short sale process. Even if it’s that so-called “impossible” transaction, give us a shot at it! 888-746-7820  Info@shortsaleexpertsinc.com

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925 B Street Suite 102
San Diego, CA 92101

Phone: 1-888-746-7820
info@ShortSaleExpert.com