The Short Sale Process Can Be Complex
The short sale process can be convoluted and difficult to follow for those who are new to them. In this blog post you are going to get a better idea of how they work and how you as a seller can go through a short sale and get the best deal on your property. There are several important factors that you should consider and be aware of in order to make the sometimes stressful process of short selling your home as smooth and problem-free as possible.
An Experienced Short Sale Agent is Essential
One of the most important things you can do as a seller is to hire an experienced agent who has handled many short sales in the past and knows how go to bat for you and negotiate for the highest price possible. Agents who are knowledge in short sales know the pitfalls that can show up in the process and how to navigate through those pitfalls without harming the seller’s interests. Hiring the wrong agent will result in either an unacceptable short sale price for the bank which will likely lead to foreclosure and damage your credit for several years.
Our ultimate goal to the seller at The Batchelor Group is to prevent this from happening so that a client is never threatened with foreclosure and never has to deal with the poor credit that results from an unsuccessful attempt at a short sale. Foreclosures and the damage to your credit can prevent you from being able to buy a home for the next seven years and can raise the interest rate on your credit cards, car payments or any other loans that you may have. So it is important to find the best agent like The Batchelor Group who can maximize the chances of avoiding any risk to your credit that selling your property may have.
One of the first things we can do is to prevent what is known as a deficiency judgment on your credit. A deficiency judgment is where your bank, your mortgage company, can file suit to collect from the seller any loss that they have incurred on the home. That loss can include anything in the balance between the difference of what you owe and what the property sells for as well as any commissions, closing costs, and rehab costs that the bank has to incur. Anyone who is short selling a home should avoid a deficiency judgment in any way possible to prevent furthered losses that can be substantial in a short sale. What we can do in this case is to negotiate for a deficiency waiver where the bank agrees not to pursue such judgments. This makes the short sale process a lot less risky and can put the seller at ease when going through the negotiation process.
The Hardship Package
Another thing an expert agent can do for you is to help you with what is called a hardship package. The hardship package is a way to communicate with the bank what difficult financial situations you are going through. It can help the bank understand better both the necessity of the short sale as well as a justification for the asking price that the seller is willing to accept. We at The Batchelor Group know how to handle this process by helping you write an effective hardship letter, and go through the important financial documents the bank will need in making a decision. If the hardship package is put together well, it can make it more likely that the bank will accept a price the seller wants.
After the hardship documents are submitted, the real estate agent can then start to list the property. The agent will do a market analysis, including adjustment and complications, and price the property correctly so that it is likely to sell in the current market. Once the property is listed and is priced correctly it should get multiple offers fairly quickly in today’s market. The agent can then take these offers and start negotiating with the bank for a closing price. The negotiating process can take anywhere between three and nine months due to many factors such as liens on the property which have to be dealt with during that time. If the negotiation is successful, then the seller will get an approval letter from the bank giving the seller 30 days to short sale and close on the home.
Take Advantage of Short Sales
Finally, keep in mind that with this sell you are never responsible for commissions or closing costs, and due to the deficiency waiver you will not be responsible for the difference on the property. As well, you have the right to continue living in the home during the negotiating process. An advantage of completing a short sale by the end of this year under the mortgage debt relief act in the United States, you will not be responsible for taxes on that home to the IRS. If you have any other questions, please feel free to contact The Batchelor Group today in any part of the country that your home may be located in. We would love to help you. Remember, our services to you are free, so take advantage of our many years of experience in helping sellers with short sales.
Key Points To Remember:
- The short sale process can be complex and it is beneficial to have an experienced agent involved.
- Agents can help you in getting deficiency waivers and in putting together hardship packages in negotiating with the bank.
- Short sales can provide advantages to those needing to sell their home.
- The Batchelor Group is here to assist you in any way in the process of selling your home in a short sale.