Short sales spread across real estate market, leaving frustration in their wake

As more homeowners find themselves underwater — owing more on their mortgage than their home is

currently worth — and unable to make the monthly mortgage payments, many are turning to short sales,

which allow a homeowner to sell their home for less than owed on the mortgage. Short sales can be a winwin

situation for all parties, because they enable home buyers to purchase properties in desirable

neighborhoods and at favorable prices.

KEEP THIS IN MIND

• • Theoretically, short sales should be a win-win for the bank and the homeowner. Although the bank

does not receive the full amount owed on the mortgage, it also does not incur the costs of

foreclosure and/or eviction, if necessary. Many homeowners also prefer short sales because it is

less damaging to their credit scores than a foreclosure. However, many real estate experts say

that the majority of banks are reluctant to approve short sales, and often let properties go into

foreclosure, even when there are reasonable offers on the property. In addition to considering the

price, most lenders also take into consideration whether the homeowner can demonstrate financial

hardship. If the homeowner is capable of making payments, many lenders will try to work out a

loan modification, rather than a short sale.

• • Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell

properties are likely to be better maintained, as most owners may still live in the home.

• • Short sales often are more time intensive than traditional transactions and often require additional

paperwork. Due to the large number of offers on short sales, many take as long as a few months

to receive approval. If information or required forms are missing or incomplete, the bank may set

the offer aside, which could delay the process and cause the property to go into foreclosure. To

expedite the process, sellers should work closely with their REALTOR® to provide all of the

necessary paperwork

• • Working with a REALTOR® who has experience with short sales can help both sellers and home

buyers during the transaction. A seasoned REALTOR® will be able to serve as the mediator

between the seller and the lender, and lead to a successful transaction.

• • It is important to remember that in a short sale, although the seller may be anxious about selling the

property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what

price, the property can be sold. Home buyers should work closely with their REALTOR® to submit

realistic offers.

To read the full story, please click here:

http://www.chicagotribune.com/classified/realestate/chi-sun-short-sales-0920sep20,0,5529436.story

This entry was posted on Friday, September 25th, 2009 at 5:21 pm and is filed under Short Sale. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.