Seven Short Sale Myths

A lot of Austin homeowners facing foreclosure shy away from short sales due to the amount of myths that have flooded the market. When faced with foreclosure, hesitation is the only thing that will ensure the worst results.

Getting to the bottom of these myths will put you at ease and better prepare you to seek out the proper course to obtain the best results from your circumstances.

A common concern is that Austin buyers aren’t in the market for short sales. The complete opposite is true. Some buyers shop them exclusively. So often that short sales have become their own genre in real estate.

Not to mention, international buyers are jumping into the hunt for short sales. With the help of the right real estate agent, one who is familiar with short sales and experienced in the process, you’ll have all the right information to secure a contract in no time.

Some people think that you can only negotiate a short sale once you’re knee-deep in the foreclosure process. The longer you wait, the fewer options you’ll have and the less time to get things rolling. Don’t wait for the bank to make the first move. Be pro-active.

A short sale requires three conditions:

1) Evidence of hardship: proof that a situation has arisen causing you to miss payments.

2) A current or imminent lack of income: documents showing that your income can’t catch up to your obligations.

3) Insolvency: a lack of liquid assets that might otherwise help you pay off your mortgage.

Once those conditions are met, be prepared to make things happen on your own.

Which brings us to another common fear: time. “There’s not enough time before the deadline.” This one is a killer. It almost promises failure.

The truth is, most banks and lenders readily postpone foreclosures after a simple phone call explaining your intention to perform a short sale on the property and once again when you’ve secured a contract. Working with an experienced professional can pay dividends.

Along the same lines, a common rumor is that banks avoid short sales like the plague. Again, the complete opposite is true. Going through with foreclosure costs lending institutions far more than accepting a short sale.

Banks want short sales. It makes more fiscal sense. A short sale guarantees the recovery of more of their debt than does risking a bunk auction after foreclosure. They receive a better return. Banks can be trusted to make the move that will gain them the most.

The root of this rumor may have begun with unqualified or uneducated homeowners being dismissed by banks because of improper forms, a lack of documentation, laziness or incompetence.

The absolute best way to navigate your way through the cluttered waters of the banking system is to educate yourself, as well as seek the advice of a real estate professional who is trained in how to successfully handle short sales.

The last myth to dispel is a mental one. Along with feeling defeated and alienated, you may feel embarrassed about your situation. Concerned that your property will wear the unwanted brand of a short sale.

This can be fixed with simple statistics. Not only are 1 in 6 Austin homes foreclosed upon each year (nearly 2 per block), but estimates place around 40% of all listed houses as short sales.

You are not alone. But you can distinguish yourself. Educate yourself, find in yourself the proper motivation, and combat your situation with real estate agents and professionals who have applied their expertise to many homeowners just like you, and you will find the results that you want.