WILL YOUR LENDER BE WILLING TO DO A HOUSE SHORT SALE?

Can You Do a House Short Sale in This Market?

Most likely your lender will be willing to do a House Short Sale today! In many areas of the country, home prices have declined just a few percent.

Lenders for these homes will not realize a tremendous shortfall. In these cases, it's far less costly for the lender to do a House Short Sale, rather than going forward with a foreclosure. If they were to hold out and do a foreclosure, they would have had all the costs associated with not being paid mortgage payments on the property for several, or even, many months before foreclosure.

The lender would also have legal fees and the costs of having the home in their real estate owned (REO) portfolios. These costs include taxes, maintenance and commission for the Short Sale Realtor® to sell the home.

You'll Need a Short Sale Specialist!

If you're trying to do a House Short Sale and avoid mortgage foreclosure, your home will need to be listed with a Realtor®, who is a Short Sale Specialist. Your Realtor® needs to know how to negotiate a mortgage short sale with your lender and what paperwork is required. In fact, not many Realtors® do have the appropriate training. If you are trying to do a house short sale, and your home is listed with a Realtor®, ask them to visit this website and take the free short sale training offered here. If your home is not listed and you are in need of a Short Sale Specialist who can negotiate a short sale, we can connect you with a Realtor® in your area.

The list price of your home should be just slightly below market value so that there will be showings and activity, making an offer to purchase more likely.

Your home should stay listed at that price for about one month. If there are very few showings and no offers to purchase, your Realtor® needs to reduce the price. The lender is losing money on this home and they want to make sure that your Realtor® tried to get as much money for the lender as possible.

Can You Do a Mortgage Short Sale Here?

In parts of the country, like Florida, Arizona, Nevada and California, where real estate was the hottest in the latest real estate boom, home prices increased in value the most a couple of years ago. These are the areas where prices have declined the most in the current real estate bust. In these areas, homes have decreased in value by 30%-40%. And, some experts agree that prices will decline further.

The greatest factor determining how low an offer the lender will accept is the Broker Price Opinion (BPO). When an offer to purchase is submitted, the lender hires a Realtor® or Real Estate Broker to inspect the property and submit an opinion as to what the home could sell for.

This is the first time in recorded history that prices have fallen so sharply in certain areas of the country, so we're in unchartered territory as far as the lenders opinions and positions are concerned.

As long as the Broker Price Opinion comes in at the right price, meaning very close to the list price, it would be folly for the lender to turn down an offer slightly below market value, even if the offer price is $100,000 less than the amount owed. This difference is quite common today in areas where the real estate boom was the strongest. However, each lender has their own policies and procedures.

Is Your Lender Willing to Help You Avoid Mortgage Foreclosure?

It certainly seems likely that lenders will be accepting offers at well below what's owed on the home.

We have Realtors® in our network who are trained in short sales. If your home is already listed with a Realtor® and they need some short sale training, send them here.

If you want more information on whether you really should try to save your home you can find out here.