Recently I’ve had more people ask me the question, what is a short sale, than I have in a long time. What a change from the last few years of a strong market. However I shouldn’t be surprised because every experienced agent knows that the market cycles changes every 10-12 years. So if you look at the last turn of the market, we peaked between 2005-2008, bottomed in 2010-2012 and now it’s 2020. Maybe it’s time to go back down!
So What is a Short Sale?
A short sale takes place when a home seller sells their home, when they owe more than it’s worth. To happen, you first have to have a sales contract and the lender has to agree to allow a shortfall. The obvious first question is always, why would the lender agree to that? And the answer is simply. Lenders are not in the business of owning real estate and don’t want to take back properties. Plus, the foreclosure process depending on what state it’s in can be an expensive and take a long time. So for a successful short sale to take place, several things have to happen.
You Pay No Commission on a Short Sale!
Since you owe more than your home is worth, the bank pays the realtor fees!
Prep-Work
Having handled lots of short sales after the financial crisis, we’ve discover the key steps for short sale success. We handle the process of getting a short sale approved the same way an attorney preps for a case. In a short sale we consider the bank is the judge, and our client is the defendant. Our job is to prove to the bank two things. First, our client truly has a hardship and second, we have sold the home for the highest price possible. If we can accomplish these two things we are on our way to a successful closing.
Short Sale Homework
In the beginning, consider the process of getting your short sale approved is like applying for a mortgage in reverse! Basically there is a lot of paperwork to be filled out and plenty of financial documents to submit. Very similar to getting a mortgage. But the difference here is that you’ll want to show the bank that you can no longer afford the mortgage. So what is important to the bank is that you have a legitimate hardship. And you income is now less than what is needed to cover your bills. Typically approved hardships that we’ve seen approved have been: job relocation, loss of job, military transfer, death of a spouse. This doesn’t mean that these are the only types of hardships that can be approved. These are simply the ones that we’ve seen the most.
Getting It Done
So hopefully this post has given you you a basic idea of what’s needed to approach selling a home as a short sale. As always professional guidance is critically important. Since we’ve been handling of short sales for many years, this process is not new to us! Getting our feet wet with short sales after the financial crisis in 2008 we’ve learned a lot along the way. This experience is a benefit to anyone in Charleston considering a short sale.
Obviously there is much more to a short sale. To get started we would meet with you for a brief consultation to discuss your unique situation. Then if we both feel like we are compatible and want to move forward working together, we can start the process.
So if you or anyone you know is considering selling a home as a short sale or buying a short sale, give us a call 843-972-7670 we will be happy to help. Or you can fill out the form below and we will reach back out to you. We are your Charleston Short Sale Experts!
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The Author…
Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped numerous families and individuals during the previous housing crisis you can feel comfortable that Bill’s experience and expertise is unparalleled in our market. More About Bill
