Short Sales

I have been thinking about what is different in this marketplace that two other downturns I have seen in my career. The most significant things have been the large number of foreclosures and short sales. Most of us are familiar with foreclosures at least in concept...the homeowner does not pay their mortgage payments for a period of months and the bank owns the house. The homeowner must leave, sometimes with the help of the sheriff, bank then disposes of the property.

Short Sales, by contrast, happen when the homeowner negotiates generally though an attorney with the bank to allow the property to be sold for less than the homeowner owes on the property. It is done without a foreclosure if the property can be sold quickly enough and is less damaging to the credit of the borrower.

Since time is of the essence, once the homeowner realizes they are in trouble and it is unlikely they will be able to continue to live in the home, it is critical that they call in a real estate professional who can guide them to an attorney who is experienced in short sales. The Realtor can advise the homeowner on preparing the home for sale, the attorney negotiates with the bank and advises the homeowner how to proceed. The experience of both of these professionals is key to the success of the sale. More on this next time