Maybe you have an inkling that your home is worth less than you actually owe. Maybe you are too scared to know for sure. But you take the plunge anyway and enlist a real estate agent to perform a market valuation and a Comparative Market Analysis (CMA) which proves that indeed your home value has taken a serious tumble.
If you need to sell, you could qualify for a short sale.
But what does this mean exactly? Why choose to market your home as a short sale rather than opt for a foreclosure?
“Most choose the short sale route to protect their credit as much as possible,” says Anita Colletti of John R. Wood Realtors. “It is seen as a responsible option to foreclosure.”
Bear in mind, a short sale will impact your credit but not as severely as a foreclosure.
How do you move forward?
The first, most crucial, step is to list your property with an agent who is certified in short sales. Call up a local, reputable real estate company and inquire about those who are qualified. There are two designations to look for: Certified Distressed Property Expert (CDPE) and Short Sales & Foreclosures (SFR).
The agent will pre-qualify the property for a short sale but ultimately it is the bank’s decision whether or not it actually qualifies. “A short sale is not intended to be a bailout for those who invested in real estate and the market went bad,” explainsAnita who specializes in Naples real estate. “It’s for those who encountered a hardship after they purchased the home.”
Next, do what you can to keep the property marketable. Keep the grass mowed, the power on, the appliances in place, and the overall home in relatively good condition. If the property is stripped or uncared for, it will be more difficult to sell.
Lastly, realize that this type of sale is not a negotiation. It is the agent’s responsibility to facilitate the short sale on behalf of the seller and the bank.
A final note: Generally, there is no profit from a short sale, but you, the seller, also incur no out-of-pocket costs either. The bank takes the loss and the bank pays the Realtor fees. Exceptions occasionally occur, such as if there are other liens on the property, including unpaid taxes or association fees. Those will have to come out of the seller’s pocket.
Tags: Buying a Home, Short Sales
