Top 5 Short Sale Selling Mistakes Any Home Seller Could Make

Top 5 Short Sale Selling Mistakes Any Home Seller Could Make

An increasing number of homeowners today are becoming informed about the term short sale; however most still do not fully comprehend the full scope of the short sale process.

A short sale in real estate is when the sale of an apartment falls below the level of the balance on the mortgage loan. In other words, the seller of the property owes more than what he or she wants to sell for.

The mortgage lender (or bank) also has to agree to a loan balance reduction or agree to take less money that what is owed. Typically, the owner must prove financial hardship before a lender will accept a short sale property.

Even though this may not be the ideal situation with the owner, it is a better option than going into foreclosure because the short sale typically doesn’t hurt the owner’s credit score like a foreclosure. Short sales are far more complicated than regular home sales. One of the reasons for the additional complications may be the intimate involvement of the bank. The bank is nearly as active in the transaction as the vendor.

They have to approve the retail price and they have final approval of the sale. This added involvement complicates the home selling process via additional approvals, additional delays and could bring about the rejection of many offers the seller desires to take.

Short sales certainly are a complicated process which in turn, if not treated properly, can backfire as well as cause the sellers to lose their home as a result of foreclosure proceedings. To deal with the added complication of a short sale, a realtor who is experienced in conducting short sales and knows how to effectively negotiate with the bank is required.

Notice I said “experienced”. Try not to commit the error of letting an inexperienced agent learn what to do and what not to do with your property. If that agent falls flat, you’ll likely be going towards foreclosure. Here are five critical short sale selling mistakes a home seller could make:


The first thing a homeowner should do when considering offering their home is to find a real estate agent. Several agents suffer in this tight economy, and will generally undertake short sales while they currently have practically no experience in it. It is crucial the realtor a homeowner picks has successfully closed this kind of transaction before.

In case the agent hasn’t closed one, then the property owner ought to strongly consider going with a more experienced agent. The real estate agent’s familiarity with closing this type of transaction is critical for a successful short sale, and many of the agents do not realize the amount of work required in getting it closed. The less informed agents often lose interest and the house could easily get lost to foreclosure.


Another common mistake homeowners make while selling their property this way is listing their house at the drastically wrong price. Pricing can always be challenging, because this form of sale should price competitively to be able to contend with various other standard listings inside same area, however, it really can be foolish to price the house well below marketplace value.

Marketplace price is vital whenever negotiating with the bank. A loan provider will not consider more than a 10-15% reduction in market value. When a real estate agent submits a number of low ball offers to the mortgage lender, the financial institution will undoubtedly reject the offers and the house is likely to end up in foreclosure.

Not surprisingly, home owners who make a decision to sell their undervalued property are usually doing this under pressure. They genuinely do not desire to sell their property, but would like to prevent the home foreclosure, so they select the lesser of 2 evils.

Uncooperative home sellers make a mistake in not truly cooperating with the short sale procedure as they are merely postponing the inevitable, and more frequently than not, these home sellers lose their homes in real estate foreclosure simply because they were not committed to the process from the start.


A number of agents think pricing alone would sell a short sale, so they urge sellers to place a ridiculous price tag on the home. Then the agent consciously refuses to adequately advertise the home. Not only should the price be reasonable, but yet the house deserves the same type of treatment as every other listing.

Short sales ought to be presented to the widest possible pool of buyers, which means putting that listing on all the major sites, and incorporates doing standard mail marketing and networking


In some circumstances, selling quickly is usually unavoidable. That’s when it pays to know the right techniques to quickly sell your house without looking desperate and making yourself a prime target for the low-ball bidders. The way to make this happen is to keep house in the best condition.

Sellers really have to ready the house for sale and keep it in immaculate condition. Buyers can’t see beyond the clutter on a new messy house. What is more, a number of buyers have concerns that when the property is at disarray during any showing, the sellers may possibly trash it upon vacating. A simple change, say for example a brand new coat of paint may do magic.


Make sure you are not overpaying on the property. A single mistake can ruin your efforts and unfortunately most of these mistakes linger long once they are made. Holding costs can result in increased debt.

Always remember that for a deal to create a win-win situation, the seller needs to get out of debt without resulting tax consequences. On the other hand, the lender must feel that they are getting the most net worth possible and the agent should bag a decent profit. Once you avoid these mistakes, you have a better chance of having a successful short sale.

Four Short Sale Myths To STOP Believing

Four Short Sale Myths To STOP Believing

There is absolutely no reason on our green earth to walk away from a home when you can complete a short sale and get a release of liability. A short sale is much better for your:

In certain circumstances, there is no deficiency judgment and more likely no taxes due on the forgiven debt. Please check along with your accountant and get legal advice before embarking on the short sale to learn if you will certainly owe taxes and whether you will end up released from the debt.

There is no magic short sale pill that makes debt disappear, unless you are eligible for non-deficiency or negotiate non-deficiency with your bank. Keep in mind that a short sale just like a foreclosure is a serious financial and credit report situation. A real estate lawyer and tax accountant can advise on which way is better to follow.

A short sale can be an astounding answer for property holders who must sell and owe more on their homes than they are worth. Tragically, various myths about short sales have developed, and it is imperative to comprehend the truth of this procedure if you discover it meets your present needs.

Short Sale Myths

Myth #1: Your Bank Would Rather Foreclose Than Worry About a Short Sale

This is essentially the most common misconceptions. The reality is that banks tend not to want to foreclose with your property because this foreclosure process is really costly. Banks, investors, and even the government have all widely stated that if one is qualified for a short sale, the deal must be considered. Overwhelmingly, banks receive more on the investment through a short sale than any foreclosure.

The qualifications to get a short sale consist of:

  • Financial Hardship – There exists a situation causing you to definitely have trouble paying up your mortgage.
  • Monthly Income Fault – “You have an overabundance of month than money.” A lender may wish to see that you cannot afford, or soon aren’t going to be able to find the money for your mortgage.
  • Insolvency – The lender will need to see you don’t have significant liquid assets that would enable you to pay down your current mortgage.

MYTH #2: Banks Usually Take Forever To Respond To Short Sales

Through Bank of America/GMAC’s Equator System and Wells Fargo/Wachovia’s Fast Track System, moneylenders are no more putting the cart before the horse and are expeditiously reacting to contract values.

Both HAMP and HAFA have ended up being epic disappointments. The Home Affordable Modification procedure is constrained in degree and applicability, so as well, was the incredibly touted HAFA procedure looking for foreclosure alternatives. Be that as it may though, leading to HAFA, lenders were required to make a new paradigm to address short sales for those property holders who applied for alleviation under HAFA.

Beforehand banks concentrated on qualifying the Seller for a short sale. Ordinarily the loan specialist would take months to examine and revise the financial information wasting valuable time before concentrating on the sales contract and offering price.

Today, banks are starting to concentrate first on the property estimation to check whether there is a potential deal at the price. As a consequence, many times loan companies now will either accept the retail price terms or swiftly counter the buyer’s offer to seek to solidify the deal first then the next phase is to address the seller’s situation and know very well what, if any, contribution will be needed.

MYTH #3: It May Be Better To Let The Bank Foreclose

A deficiency judgment is the difference between the debt to a lender and the fair market worth of the property during the foreclosure sale. For instance if the outstanding mortgage balance is $500,000 and the fair market value of the property is $350,000, the bank may choose to pursue a claim for the difference (deficit) of $150,000.

Sad to say, borrowers have no control when it comes to deficiency judgments. The ball is solely in the lender’s court since lenders possess the legal right to pursue the total amount of any deficiency. Contrary to popular belief, a deficiency judgment can often be pursued by handing the property back through a deed in lieu of foreclosure, unless the bank agrees in advance to cancel the debt.

The degree to which a loan specialist will pursue a deficiency judgment is based upon many factors. The more noteworthy the assets the borrower has, the greater the probability the loan specialist will seek after a deficiency judgment. In spite of mainstream thinking, not all loan specialists are simple-minded. The primary thing a moneylender will do before making this race is to review your original loan application and any financial updates the borrower may have given.

As a direct consequence of the potential of a deficiency judgment, we encourage borrowers to stop foreclosure, the safer way is through the short sale process. Unlike a foreclosure action in which the borrower has no control over the deficiency judgment, if the home can sold by having a short sale, the borrower prevents the stigma of a foreclosure on their credit report and avoids a new deficiency judgment.

Myth #4: You Must Be Behind on Your Mortgage to Negotiate a Short Sale

While this may have been the case before, today lenders are seeking verifiable hardship, monthly cash flow shortfall or pending deficiency and insolvency.

If you meet these three requirements and feel that you soon may struggle to afford your home finance loan, act immediately. Any deferral could limit your options. Try not to hold up until the countdown to foreclosure has started and you have even less time.

VA, MD & DC Short Sale Advice

Welcome to our Blog!  The mission of this blog is to provide you resources and tools to help you understand all your options.  We are pre-foreclosure experts that provide FREE Advice and consultation regarding your situation. 

What is a Short Sale?

A short sale occurs when the debt on the property is more than the property is worth.  Under the right circumstances banks will allow you to “sell it short” of what is owed but you need to be able to prove that you are experiencing a hardship.

How We Help.

We have a dedicated team of specialized real estate agents and negotiators that know how to navigate all the little details, strategies and complexities of doing a short sale all at no cost to you.  The banks pay all the commission and fee’s which means our interest are aligned and we only get paid by the banks if we successfully negotiate a short sale.