Absolutely anyone considering a short sale should not believe these myths are true. As a Real Estate Broker in Antioch, Ca I am shocked by the misunderstandings and myths about loan modifications and short sales today. These myths have paralyzed many homeowners from doing anything at all and therefore many homeowners end in an unnecessary foreclosure. Below are my Top 7 myths.
Top 7 Myths surrounding short sales.
Myth #1. A short sale is the same as a foreclosure.
NOT TRUE. A short sale is very different than a foreclosure for several reasons the biggest is that a short sale is a voluntary process for all parties involved and foreclosure is generally involuntary and a homeowner can be forced to leave their home after a foreclosure. A short sale is NOT a foreclosure. What is a short sale?
Myth #2 I must be late on my payment to short sale my home.
NOT TRUE. Many lenders now are far more cooperative with homeowners wishing to short sale even if they are current on their mortgage. Specifically when a homeowner has an acceptable hardship, relocation, or inevitable future default. Many lenders now have a process to submit a short sale for pre approval prior to the property being placed on the market. Also known as a cooperative short sale. Short Sale Timeline
Myth #3 A short sale has the exact same impact on my credit report as a foreclosure.
NOT TRUE. The FICO score is a complex matrix making it very difficult to determine the exact impact on a credit score either a short sale or foreclosure may have on a particular homeowner however we do know that when a short sale is completed it is not reported as as a foreclosure. When applying for various kinds of employment, credit, or housing an applicant may be asked if they have a foreclosure however rarely would an applicant be asked if they have had a short sale. Therefore generally a short sale is better than a foreclosure on a credit report. Short Sale vs. Foreclosure
Myth #4 To short sale I must have a sign in my yard and a lock box on my door.
NOT TRUE. As a Real Estate Professional in Antioch, Ca I have found that many homeowners considering a short sale do not want to announce to their neighbors through a sign in their yard or window their decision to short sale their home and they definitely do not want to have a sign rider that says “short sale” or even worse “foreclosure” in their front yard. I have also found many homeowners do not want to have the infamous blue lock on their front door or to give access to their home to anyway who has a lock box key. These concerns are very real and legitimate therefore many of the homes we have for sale in Antioch, Ca and the surrounding communities do not have a sign or lock box and they definitely do not have a sign rider that says “short sale” or even worse “foreclosure” at all and because of the strong buyer demand for housing in today’s real estate market I have found it is generally not necessary. Read Reviews of others who may have had similar concerns.
Myth # 5 There is no way to determine if I may be eligible for a short sale prior to placing my home on the market for sale.
NOT TRUE. There are many ways to determine if a homeowner may be eligible for a short sale prior to going through the efforts of selling. First, large banking institutions like Bank of America and others now offer Cooperative Short Sales. A Cooperative Short Sale can provide homeowners a short sale pre qualification with a required amount that the bank is requesting in order to provide the short sale approval. Second, the short sale that provides homeowners a minimum of $3,000 (HAFA) has 6 questions that can help determine eligibility. Check Eligibility
Myth # 6 A short sale is the only option.
NOT TRUE. There are many options that exist today including loan modifications, short refinances, deed in lieu of foreclosure, forbearance, renting your home, and others. So a short sale is not the only option. With rising home values you may even find a short sale is not necessary and there is now equity. Check your home value.
Myth #7 I have nothing to gain by short selling my home.
NOT TRUE. In addition, to the many of benefits listed above and others. Many lenders today combined with programs like HAFA (making homes affordable program) offer from $500-$45,000 to qualified homeowners to short sale. In my experience the most common short sale relocation assistance is $3,000 and provided by HAFA. Check Eligibility
For more information about short sales read.
Rick Fuller is a Licensed Real Estate Broker in Antioch, Ca 94531.
Contact Rick at (925) 238-0160 for a Free Option Orientation to discover if a short sale is right for you. Contact Rick