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Sharon Ofori, Real Estate Pro in Longmeadow, MA

If more homeowners uderstand the "short sale " process they would be willing to sell. Do you agree?

Asked by Sharon Ofori, Longmeadow, MA Sun Nov 18, 2012

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No, I respectfully disagree. Most homeowners I know of who are underwater do not want to sell, take a big hit to their credit and be forced to rent to rebuild their credit to be able to buy. While in some situations this may be the best thing, that isn't anyone's decision but their own. I am hearing that they want to short sell in order to take advantage of lower cost homes and interest rates, but they don't qualify to buy directly after a short sale.

What most homeowners really want is to lower their loan amounts, which is not something that will happen in the way they desire.
2 votes Thank Flag Link Sun Nov 18, 2012
If more homeowners in foreclosure understood the short sale process and outcome, there may be more who would try it.



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1 vote Thank Flag Link Mon Nov 19, 2012
I strongly disagree; there would probably be many fewer short sales if they truly understood the possible ramifications. Not just financial but personal implications, there is NO free lunch.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
1 vote Thank Flag Link Mon Nov 19, 2012
Financial problems associated with home ownership is not a "one size fits all" scenario. Having access to current and accurate information relative to your options and personal needs is paramount to success.

Seeking expert advice that goes far beyond what a realtor can legally provide is essential to being able to chart a good course for an individual's needs. Many people mistakenly make the assumption the getting legal advice will be cost prohibitive and out of there reach. Good legal services can cost money but it has been our experience that it is not excessive and is usually worth the effort.

I'd like to rephrase your question to make a point. "If more lenders took their responsibility seriously, there would be less need for the "short sale" process.
1 vote Thank Flag Link Mon Nov 19, 2012
Understanding does not really equal selling but it allows the homeowners to make, as mentioned here, a more educated and informed decision. But it really depends on the sellers, each situation is different, and most want to keep their houses, but it all really boils down to their Budget and circumstances.
There are some other options & programs available to homeowners besides short sales such as forbearance, loan modifications, UP, PRA, 2MP, HARP, FHA Short refinance to name some. A Short sale is not the easiest transaction but it is also an alternative to avoid foreclosure. Short Sales are less damaging to your credit, and easier to recover from, than Foreclosures and a better option. I think homeowners, and agents/brokers too, would be better off if they familiarize themselves with these options so that they can make a more informed decision and determined if a short sale is the best solution for the homeowner.
1 vote Thank Flag Link Mon Nov 19, 2012
Well, better understanding would definitely help the seller make a more informed decision. Whether or not a short sale would be in their best interests depends on the seller.

In the cases that Kathleen points out ... if the alternative is foreclosure and they know it, then a short sale would be a better option than foreclosure.

If the cases are more like those Ellen and Sarah seem to encounter, a short sale will probably not give them the result they are seeking ... which is to unload a house that is no longer worth what they'd paid for it. In those cases, it would probably be worth it for them to approach their lenders to discuss a refinance. If they are over 65, they may qualify for a variety of government programs ... but there may still be ways to benefit from the lower interest rates, without unloading the house.
1 vote Thank Flag Link Mon Nov 19, 2012
Thanks for all the light shed on this. Great answers, I guess I was looking for a simply solution to a problem far more complex then then the easy way out. I will begin to look at each situation a little differently.
0 votes Thank Flag Link Mon Nov 19, 2012
Ellen and Sarah make excellent points. Wen does suggest the right solution is directly related to the home owners situation.

When a citizen is placed in a situation where they must select a "Least Worst" option in an arena as unpredictable and complex as a short sale, decision paralysis is not uncommon. Our expectation of the citizen to understand such transactions in which we are immersed in everyday, may be just too great a reach.

In my opinion, discussing a short sale is an exercise in futility. However, discussing the outcome most beneficial to the homeowner, (5,6,7) and the instruments available to achieve their stated goal, is the most productive approach.

As stated before, most want to stay in their home. The deception of mortgage modifications is incredibly demoralizing and places a homeowner is a 'skeptical' frame of mind. Principle reduction is the solution, but is the exception. Short sales occur because this is the process the banks have in place. A destructive, punitive, costly option. Sigh...it's the tool the banks make available and we all must utilize.

More people would be willing to engage in a short sale if the outcome was more predictable. Solve that and you will have a winning plan. There most certainly ARE ways to accomplish this. Remove the uncertainty and you will have a willing seller who is ready and prepared to move on with their lives.
0 votes Thank Flag Link Mon Nov 19, 2012
I agree with Sarah. As someone who is primarily a buyer's agent I have seen many short sale situations where the sellers have been persuaded that a short sale is an easy way to get rid of a home they are having difficulty selling. But they do not understand that a short sale is as damaging to their credit as a foreclosure would be. Some of these people do not have to sell, but just want to move on. As Sarah has pointed out, they don't learn until it is too late that they are not going to be able to buy another home because of the damage to their credit ratings.

Ellen G. Friedman, Keller Williams Realty, http://www.ellenfriedmanhomes.com
0 votes Thank Flag Link Sun Nov 18, 2012
There are many homeowners who call my team too late in the foreclosure process to be helped. So for them, I would say "yes" had they known or understood Short Sales better they would have given it a try.
0 votes Thank Flag Link Sun Nov 18, 2012
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