I would like to thank the Wall Street Journal for their recent article “House is Gone, but Debt Lives On.” It prompted me to write about something I have been thinking about for quite awhile. Short sales.
There are many homeowners that are behind on mortgage payments and they may or may not have their home for sale. For the majority that do have their home for sale, I have just one thing to say.
Wake Up!!!
You are better off doing what ever it takes to get your house sold via short sale then being foreclosed upon.
According to the WSJ article lenders can go after the mortgagor for a deficiency after foreclosure in 42 states. In my experience, lenders have a willingness to forgive the deficiency on a short sale. J.P. Morgan is quoted in the article saying they, “may obtain a deficiency” judgment in foreclosure cases but will “often waive” the leftover debt when a homeowner agrees to a so-called short sale of a house for less than is owed on it.”
The mental adjustment that sellers need to make is that they need to get agressive and figure out where the market is today. Many have not priced their properties to the current market because they are thinking about what they paid and what they owe. Depending on when they purchased, the difference can still be as high as 50% in some markets.
There is a market out there, we prove this every day. If you are a seller get agressive. Have a short sale auction or get seriously agressive on the pricing and marketing with your agent.
There are a couple of advantages to going the auction route.
1. No guessing at what the price should be to generate interest. Getting agressive on pricing with an agent may take multiple price reductions before you get showing activity. With an auction, we will get the activity right away, no guessing required.
2. Even if you get showing activity it can still take awhile to get someone to make an offer. These offers are also more traditional. Meaning they will often have contingencies like inspection, financing, etc. With an auction, you can have the contract on your terms, which will mean cash and contingency free.
3. At Concierge, we will help with the lender, all the way to them either accepting the short sale contract or rejecting it. We have solid experience with short sales and many of the institutions and have shown a great track record of getting your short sale approved.
No matter what route you chose you need to get agressive. You have a much better chance of having your deficiency forgiven if you are proactive about getting the property sold rather then letting the bank take it back. Contact us for a free seller evaluation to see if an auction is right for you:
