He seemed genuinely interested in helping me.  He was honest and up front about my questions and concerns.  His marketing plan was straight forward and clear. His suggested pricing was based on facts I clearly understood.  He was available to me anytime giving me, the customer, the feeling that I was the only customer he had.

-Stacy C.

"Short Sale" Overview

A "short sale" is when you, as a seller, owe more on your house that can be expected from a sale and you ask the lender to "forgive" the shortfall.  In other words for example, you have a mortgage on your home for $350,000 and best possible price you can expect for the home is $250,000.  In round numbers, you will need to get bank to agree to take less for the property so you can sell it.  In today's market, that makes sense.  So why then are less than 20% of the short sales being approved by the banks?

Finding properties that were upside down  started to become common place in 2007.  The short sale was the answer.  After all, knowing the market was heading down banks most certainly would take a fair and honest price now because it would only get worse as time went on.  Sellers were instructed to contact their banks and ask for a short sale package.  As we moved through this process, banks started to refuse to send short sale packages (the information the bank needed to process a short sale) unless the borrower was 60-90 days late.  Some sellers who had always kept a good credit rating balked at this and an many cases, started to utilize other credit lines, retirement, or borrow from other sources to keep the payments current.  This was a mistake as many home owners who initially balked at this, found their retirement accounts reduced, their credit lines fully utilized and in a much wore position that if they "cut it" earlier.

Banks typically won't begin the evaluation of a short sale until there is a contract on the property.  The banks would state it takes 60-90 days to get an answer.  I have heard of cases where 6 months have gone by with no answer.  So the offer gets submitted and after 60-90 days in a downward market, the potential buyers who thought they were getting a good deal start to feel like there are other properties out there for the same or less.   Then the question of would the house appraise at the buyer's offer price.  Remember, we are in a downward market.  The buyers then back out OR on the occasion where we did get a response, the bank states they need to net what amounts to more than fair market either by an inflated sales price or a by having the seller sign a note for a portion of the short fall.

This situation for us played out 14 times in 2007 (case 1, case 2, case 3).  It made made sense WHY a bank would refuse today's price verses a lower price at time point in the future.    A little more research and time, we believe we understand WHY banks don't accept short sales.  In fact, the banks WANT to foreclose and here is why.

We researched several companies who touted their unique ability get these sales approved.  When we looked at their results, we found they were not doing any better then the industry as a whole.  If one exists, please feel free to pass their name along.  Our focus is to be honest and straight forward so if there is a resource out there that has a proven track record and would be beneficial to our customers, we would like to know about it..