Short Sales occur when a homeowner sells his/her home for less than what is owed to the bank on the mortgage balance. A homeowner who makes up the difference themselves, but bringing money to the closing table is selling short, but it is not recorded as a short sale, since the bank got what it was owed. Bringing money to closing is one obvious way to deal with the situation, albeit not a very popular way. In the sales that are officially reported as a “Short Sale” in the local Multi-list Service, the bank has agreed to take less than the amount owed on the mortgage. There are credit implications to an official short sale, as well as many other possible implications. You can read more about those implications at my web site www.mishortsales.com .
A recent article on the RealtyTimes web site focused upon short sales and had links to two good short sale readings – one a blog posting by the National Association of Exclusive Homebuyer Agents on the 51 Critical things that you need to know about short sales and the other a pointer to the web site of a homeowner who when through a couple of short sales herself and decided to write a book about it. You can buy the eBook on that site. Go to http://realtytimes.com/rtpages/20120809_shortsales.htm to read the Realty Times article or you can just access the links below.
Reports 51 Critical things you need to know about short sales (a sizable PDF file of 16 pages) -
The web site for the lady who wrote a book about her experiences with short sales -
As I emphasize on my short sale web site, no one really likes doing these short sales. Short sales are generally better, in terms of credit impact, than foreclosures or declaring bankruptcy; but, they are often frustrating for all of the parties involved. The most apparent “winner” in these transactions is the buyer of the short sale house; although the frustrations and long waiting periods involved can certainly dull the thrill of that victory. Statistically, the majority of short sales actually fail to close. Many don’t happen because the lenders often pursue the foreclosure process in parallel with the short sale process and the foreclosure happened first. You might think that the bank’s foreclosure department would know that the short sale department is pursuing a sale, but you would be wrong – most banks are so siloed in their organizational structure that those two departments almost never talk to each other.
So, if you are contemplating short sales in the southeastern corner of Michigan read these items and/or go to my web site – www.mishortsales.com for even more on the process and possible outcomes and consequences. Then give me a call and we’ll discuss whether a short sale may be right for you.