OCEAN CITY SHORT SALE MYTHS - OCEAN CITY REAL ESTATE

Short Sale Myths

MYTH 1:

To qualify for a short sale the homeowner must be significantly delinquent on your mortgage or have had a Lis-Pendens or Notice of Deficiency filed against them . Lenders look for three things: a "verifiable hardship," such as a job loss, pay cut, job transfer, divorce or serious illness; a monthly cash-flow shortfall or pending shortfall and insolvency; or lack of liquid assets that would allow you to pay down your mortgage.

MYTH 2:

Short sales rarely get approved. As long as the seller's have accepted an offer based on the true market value of the property the seller's lender will usually approve the short sale.

MYTH 3:

Banks want to foreclose rather than agree to a Short Sale. Banks typically lose 30% to 40% more on a foreclosure than a short sale due to the timing, legal filings, delays, advertisements and fees to the county Sheriff. They also avoid the hassle and liability of vacant properties if they can approve a sale before foreclosure.

MYTH 4:

There's no time to negotiate a short sale. It's never too late to submit an offer to the seller's lender. In most states it is relatively simple to "stay" a pending Sheriff's sale with a simple one page letter.

MYTH 5:

It's fine to make simultaneous offers on short-sale properties. Multiple offers clog the system and could force sellers who think they have a solid offer into foreclosure when the offer is rescinded. Only a seasoned agent knows how to structure an offer on a short sale that protects both parties.

MYTH 6:
A short sale is a fire sale. Not just any offer will do. Home sellers may counter; their agents can only bring reasonable offers to the bank, which typically means market value.

MYTH 7:

Anyone can help navigate a short sale. Only choose a real-estate agent with special training in handling distressed properties with a proven track record that the agent is willing to share with you.

MYTH 8:
A short sale is not worth the effort. For buyers, short-sale properties are often in better shape than foreclosures and are priced to sell quickly. For sellers, there is no lasting stigma for completing a short sale.

MYTH 9:

Short sales are as financially damaging as foreclosures. Unlike foreclosures, short sales are not reported on a person's credit history and don't present problems with employment or security clearances. Homeowners who undergo a foreclosure are ineligible for a Fannie Mae-backed mortgage for five years, while a homeowner who closes a short sale is eligible for a Fannie Mae backed mortgage after only two years.

MYTH 10
Short-sale negotiations are adversarial. There are many buyers' agents who loathe short sales. Successful short sales are more a matter of communication and organization -- having all the paperwork in order and knowing exactly who needs what when in order to help banks approve a sale.

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	MYTH 1: To qualify for a short sale the homeowner must be significantly delinquent on your mortgage or have had a Lis-Pendens or Notice of Deficiency filed against them . Lenders look for three things: a "verifiable hardship," such as a job loss, pay cut, job transfer, divorce or serious illness; a monthly cash-flow shortfall or pending shortfall and insolvency; or lack of liquid assets that would allow you to pay down your mortgage.
	MYTH 2: Short sales rarely get approved. As long as the seller's have accepted an offer based on the true market value of the property the seller's lender will usually approve the short sale.
	MYTH 3: Banks want to foreclose rather than agree to a Short Sale. Banks typically lose 30% to 40% more on a foreclosure than a short sale due to the timing, legal filings, delays, advertisements and fees to the county Sheriff. They also avoid the hassle and liability of vacant properties if they can approve a sale before foreclosure.
	MYTH 4: There's no time to negotiate a short sale. It's never too late to submit an offer to the seller's lender. In most states it is relatively simple to "stay" a pending Sheriff's sale with a simple one page letter.
	*MYTH 5:* It's fine to make simultaneous offers on short-sale properties. Multiple offers clog the system and could force sellers who think they have a solid offer into foreclosure when the offer is rescinded. Only a seasoned agent knows how to structure an offer on a short sale that protects both parties.
	*MYTH 6:* *A short sale is a fire sale. Not just any offer will do. Home sellers may counter; their agents can only bring reasonable offers to the bank, which typically means market value.*
	MYTH 7: Anyone can help navigate a short sale. Only choose a real-estate agent with special training in handling distressed properties with a proven track record that the agent is willing to share with you.
	*MYTH 8:* A short sale is not worth the effort. For buyers, short-sale properties are often in better shape than foreclosures and are priced to sell quickly. For sellers, there is no lasting stigma for completing a short sale.
	MYTH 9: Short sales are as financially damaging as foreclosures. Unlike foreclosures, short sales are not reported on a person's credit history and don't present problems with employment or security clearances. Homeowners who undergo a foreclosure are ineligible for a Fannie Mae-backed mortgage for five years, while a homeowner who closes a short sale is eligible for a Fannie Mae backed mortgage after only two years.
	MYTH 10 Short-sale negotiations are adversarial. There are many buyers' agents who loathe short sales. Successful short sales are more a matter of communication and organization -- having all the paperwork in order and knowing exactly who needs what when in order to help banks approve a sale.