Short sales…light at the end of the tunnel

| Monday, May 9th, 2011 | 1 Comment »

Short sales are almost always looked at in a negative light. It’s tough on the seller, it can be stressful for a buyer who hopes to purchase one and it can be a lot of work for agents. I have never met a seller who is excited about having to short sell their home or a buyer who has breezed through the purchase of a short sale offer. And I can tell you that there has not been one single agent that I’ve spoken with about short sales that likes doing them. That being said, I did hear something positive today.

A client of someone in my office who short sold their home a little more than 2 years ago (in another state) was able to purchase a home! {crowd cheers} Here is the very important criteria of how this was able to occur. First of all, the seller had not stopped making payments up until the time the bank gave approval on their short sale. That means they didn’t sustain a huge hit to their credit by having late payments on their mortgage. Secondly, it had been a little over 2 years since the short sale which is sort of the rule when a buyer short sells but has not missed payments. Third (or would you say “thirdly”), the buyer had good credit (above 700) and lastly, the reason for short selling was justified. The buyer had a job transfer to Washington from California at the time when California’s housing market was in a sad state. They had an offer on the home that fell through and were not able to get any more offers at a price that would’ve prevented them from being short on the balance of their mortgage. Because all four of these criteria were in place, they were able to purchase a home!

The bad news: if you’ve stopped making payments on your home, your wait time is going to be more than 2 years. Consequently, this will lower your credit score making it harder for you to obtain another loan. If you’ve strategically defaulted (meaning you had the means to continue to pay your mortgage but chose not to), you will not have as a easy of a time purchasing another home. And as always, it’s best to consult with an attorney before making any financial decisions regarding a mortgage. And here is where I need the voice over from a pharmaceutical commercial that excludes me from any liability (Cara Erdman is not a practicing attorney or loan officer. Please consult a professional before taking her advice. If her blog posts cause a headache lasting more than 4 hours, please see your physician.)

If you have done your research and decided that a short sale is your best option, I can help you through the process. Give me a call today to get your home on the market!

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One Comment

  1. Janice says:

    Your posts never give me a headache, Cara. But you can declare yourself the antidote, “Making home buying/selling less painful.”

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