It wasn’t his fault. He bought his house in 2008 and paid the going market value for the home. He was able to get 100% and the seller paid his closings costs which bumped up the price slightly. It was a beautiful house in a thriving neighborhood. Everything seemed just right for his family. And then it happened…
He got transferred. Moving to a new state. Starting a new life. How exciting! Except for one thing…
The market value of his house wouldn’t cover the cost of his mortgage. He called the bank right away to ask them what to do. They didn’t call him back. He hired a Realtor and learned the term “short sale”. His agent began calling the bank. They didn’t call her back. He agreed to put it on the market at the current market value. He was only about $10,000 short. Surely the bank would have a plan. But they seemed as confused as he was.
They got a buyer within a couple of weeks! That’s what they needed to do, right? Find someone who would pay as close as possible to what was owed on the house. But the bank wouldn’t negotiate with that buyer. So, the buyer walked away.
So, he got another buyer. Now the price was $25,000 below what he owed. Didn’t the bank see what was happening? Why wouldn’t they talk to him and negotiate with the buyer? When he called the bank, the person who answered the phone didn’t seem to know how to say anything except “no” and “I don’t know”. There was no supervisor. No one to really talk to. So, that buyer walked away.
Finally, he found an investor who would hang on to the deal until the bank agreed to do a short sale. The house finally sold – after more than a year – for $65,000 less than what he owed on his mortgage. And it wasn’t his fault.
If you have a friend who needs to move and finds themselves in this same situation, I have good news. The banks are more open to talk to professional negotiators and I have partnered with an attorney who is a professional short sale negotiator. Yes, there are still going to be hoops to jump through. But wouldn’t you prefer to have someone who has closed multiple short sales at your side?
Look for my next blog to continue my true story about this homeowner’s short sale.