For many, the American dream of owning your home seems to be coming to a quick end. In some cases people no longer want the upkeep of maintaining their home, and just want out of their situation.
There are solutions for both keeping and letting go of your home. I have seen many sellers that have not been given a thorough explanation by their Realtor on how short sales work, and do not understand what to expect. Sellers must understand that when they go into the short sale process in an effort to get rid of their home, buyers will be bidding on their home with DEEP DISCOUNTS. It is very hard for the seller to understand this. The realization, in almost all cases, is the seller does not want to just give it away at a low ball price. What the seller needs to understand is they do not have to worry about how much or how little the bank allows their home to sell for. Why? The buyer is going to put in a low bid to see where the bank stands with a negotiable discount. In many instances this is going to seem unrealistic and often is. Sellers need to allow this offer to be accepted at a VERY low price to start the negotiating process. The bank will then determine what they feel they can let the house short sale for, and negotiations begin. This low offer is often NOT what the buyer will end up purchasing the home for, but only a place to start negotiations. I have seen too many home owners not accept a short offer, because they feel insulted. The offer price has nothing to do with an insult, only a point to start negotiations.
The seller benefits by doing a short sale vs. foreclosure, because they will not have a foreclosure stuck on their credit for 7 years, and can recover from a short sale on their credit much quicker. A seller can often turn their credit around from a short sale rather quickly depending on their situation. Working with a credit improvement company can often increase their credit score by 100 points within 6-8 months. This puts the seller in a position to start fresh and not have a lengthy credit issue due to foreclosure.
The process can take time and often allows you several months in your property while the negotiations are taking place. Working with a company who specialize in helping sellers get their property sold on a short sale vs. foreclosure is highly recommended. These companies negotiate and close transactions with the lenders, and it is a win win situation for all involved.
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Mary Pautz is a licensed broker in the state of WI and services buyers, sellers and investors.
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