Anyone who has ever sold a home can understand – with a few important differences – the short sale experience. Let’s look at some of the similarities: The goal is to sell the house and get the desired price; it’s important to keep the house clean and presentable; there will be a number of showings of the house to potential buyers; and the homeowner needs to be ready to move when the sale is finished.
Among the very obvious differences: The homeowner has no real say in the price or in rejecting any potential buyer’s offer; that is between the real estate agent and the lender. The homeowner can typically stay in the house during the sale process even if they are not able to make the mortgage payment. The homeowner walks away from the completed sale without any proceeds from the sale, but also doesn’t owe the lender anything. Finally, the short sale may bruise the homeowner’s credit history, but it won’t do anywhere near the kind of damage that a foreclosure would.
With all this in mind, let’s look at some of the typical questions we get from our short sale clients:
How long will the sale process take? Typically, about three to four months, from the initial sales agreement to the final closing.
Do I need to move out? No. Even though a foreclosure would have forced the owner to move out, with a short sale the lender typically prefers that the house be occupied for the duration of the sales process even if they are not able to make the mortgage payment.
How many showings will there be? This varies by location, season, and lots of other factors, but there should be three to 10 showings a week. If there are no showings, something isn’t right (probably a price issue), and the homeowner should consult with the selling agent.
What about my move? The owner should take advantage of the time that a short sale provides to line up somewhere else to live. That search is aided by the fact that the owner doesn’t have to make mortgage payments, so that usually frees up some cash for an apartment or rental home downpayment.
Do I need to make repairs or fix up the house? No. It’s always important to keep it as clean as possible, to make a good impression on a buyer, but no repairs need to be made. Neither does the owner need to re-carpet, paint, get a new roof or otherwise pour scarce cash back into the house.
How will my relationship be with the sales agent? The agent should be in frequent, regular communication with the owner. Not only about showings, but to provide updates from the agent’s negotiation with the lender as well. The owner should get this kind of update at least once a week.