Real Estate Short Sales — Questions & Answers, Part I – Introduction to Short Sales

What is a real estate short sale?

A short sale is the sale of a property where the amount owed by the property owner is more than the net sales proceeds. Because the lender will be losing money a short sale needs lender approval.

What are the advantages of a real estate short sale?

The #1 advantage of a short sale is emotional: As you begin to take charge of your life, your stress may temporarily increase, then decrease. Think of the short sale as a way to downsize emotional/financial stress.

What is downsizing debt?

Downsizing debt is a term of art Michele and I created. We know that when you begin working with our team with the intention to downsize your debt, reducing the amount of your monthly payments and the amount you owe the banks, you will have begun creating a new life for yourself … a new, brighter future. It is possible that your debt may be forgiven, on the other hand you may even receive $3000 in moving funds from the lenders.

If you are currently experiencing financial distress you probably could use help in planning the downsizing and creating momentum. A short sale, one of many tools available, can often help. See also: short sale survival, which includes the role of laughter … yes, laughter!

What are some of the other advantages of a short sale?

• a lesser impact on your credit
• being able to purchase another home, sooner.
• helping your friends and neighbors maintain property values (foreclosures decrease values in the neighborhood).

Do I need or do I need an attorney or accountant?

No, you don’t, but ….

As a real estate broker with the designation Certified Distressed Property Expert I believe

that it most appropriate for you to spend $200 to $300 for upfront legal advice AND have an attorney fully versed in your situation. Then, when your property goes on the market and if the bank says, ‘Yes, but …” it is easy to get quick, clear advice and support.

Do I have to stop making payments in order to get a short sale accepted?

This is a question that you would ask the attorney.

I’ve heard that short sales frequently do not succeed. Is this true?

This is not our experience. Our team’s job is to work collaboratively with you, the bank, the title company, the selling agent and the buyer. We strive to give the banks the information in a clear, clean package and they appreciate our making their job easier.

What makes short sales so difficult?

Communications.

Lenders are overwhelmed because short sales are emotional, paperwork and communication intensive. In many of the short sales Michele and I have handled, at the point of approval, the negotiators have thanked us and asked us to request them for future short sales. Not difficult.

After reading this brief Q & A you will undoubtedly have more questions. Contact us, Tom, at (415) 257-2039 or Michele Barton (415) 258-4116.

See also:         Q & A, Part II – Options

                        Q & A, Part III – Timing and Process