The only ones that benefit from a short sale are the REALTORS®
These are the words a very good client and friend told me her bankruptcy attorney said to her. At first I was really angry and decided to sleep on it until I could write about it objectively so here goes…..
YES – REALTORS® do profit from the sale – Eventually AND Sometimes. Fact of the matter is that, (from personal experience), 10 times the work goes into the process even before the work on the regular contract begins. All documentation needs to be collected from the sellers and maintained until the bank(s) decide to move on the request. All financial records need to be maintained for the seller during that time and, many times, repeatedly faxed/uploaded/mailed to the lenders because they lose them.
NO – the seller actually will benefit from doing a short sale versus a foreclosure in their credit score. The impact can be significantly lower on their FICO score as will the length of time one will carry that stigma around with them. A short sale is typically reported as “paid in full, or settled”. Only the late payments on the mortgage will be reflected after the sale is paid or negotiated.
Since there are so many short sales that take so long and many that never close, the income for many REALTORS® has significantly declined or dried up completely. There are a lot less of us out there today trying to help clients get through this economy. We joke, but it is not funny, that we might make $.36 per hour on a short sale IF we are lucky.
The best thing a seller can do if they think they need to sell their home and they are upside down in the payments or equity is to call a REALTOR® sooner rather than later to see if we can help you through this process.
I heard recently on a webinar that the estimate of Americans needing mortgage assistance, needing help with a short sale or going into foreclosure has increase by 600% to 800% over the past 2 years.
If you know of anyone who needs help, please have them call me or another REALTOR® experienced in short sales before it is too late to help.