by Michelle Fradella, Associate Broker – Keller Williams Realty Professionals
With the market changing drastically over the past few years, there is a new question that must be asked – “Can you, Mr/Mrs Seller, afford to sell your home?” Now this question may be a bit alarming to some people, but the fact of the matter is sellers are finding that the market is not able to sustain the amount of money they owe on their homes (if they have refinanced in the past 5 years), and they may not be able to get enough for their home to actually close without bringing money to the table.
Many sellers may have heard about, and think they are in the position to consider a “short sale”, but unfortunately not everyone realizes the intricacies of doing one. It’s important for a seller to notify their Realtor AT THE TIME OF LISTING, that they will come short of the amount they need to pay off their loan, and will need to ask the lender for the possibility of a short sale. Keep in mind, however, that the lender is never, in any way, obligated to actually take less than what is owed on the house, and that there are specific circumstances that must be present, in order for this to be considered.
A short sale is not something that can be handled overnight, either. The process will all depend on many variables that are not the same in each case. A short sale can take as short as a few weeks, or a few months, to over a year to get approved. A buyer may not be willing to wait for you to get that approval, or their lender may not let them wait, either.
Another important factor to know is that (even if you are in the process of working a short sale with your lender, and have a buyer ready to buy) if you don’t make your regular payments to your lender, they can, AND WILL, foreclose on your home. If you aren’t able to make the payments during this time, your Realtor needs to know this, so they can also be in touch with the Foreclosure Department for your lender, and communicate with them constantly to assure that the house isn’t taken in foreclosure. It’s standard practice that the foreclosure department and short sale department of a lender do not communicate with each other, and things can go wrong very quickly.
When putting your house on the market, you have to disclose to all Realtors and parties that your home can only go to closing if the lender approves a short sale. You will also need to get all the contact information for your lender to your Realtor so they can be in constant contact with the lender to assure that things are moving in the right direction. Be aware that not all Realtors are experienced in the intricacies of short sales. It’s very important for your Realtor to know and understand the process, to be able to assist you in the best way possible. Look for a Realtor that has the “SFR” designation (Short Sale and Foreclosure Resource).
Remember to always disclose to your Realtor, up-front, what your true situation is, and be prepared to be in the process for the long haul.