Myths About Short Sales That You Believe To Be True
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Short sales have a bad reputation due to several myths and misconceptions. There are some success stories about the short sales, but also some horror stories in line.
 
Here are the top five misconceptions about short sales:

1. Sales need 12 to 18 Months For Closure:

The fastest you will be able to close any short sales listings is at least 14 days. Even when a cooperative bank holds your loan. The lender needs seven to ten days to grant a receipt for the short sale package. It also includes personal seller documents and related real estate items.

Here, we present the time frame for an average short sale. Especially when the loan is held by a cooperative bank. Seven to ten days for the lender to grant receipt of the complete short sale package, which entails personal seller documents and related real estate items, together with the buyer’s short-sale offer.

a. A negotiator is assigned. The BPO or appraisal needs around 30 days to 45 days.

b. Extra two to three weeks for management/review by investor and short sale approval. Every short sale is exclusive, and every set of investors is diverse. The examining bank might not own the loan, so they must follow investor guidelines. You cannot blame some short sale bank as there were unreasonable to you or you hate them for a specific time.

 

2. Short Sales Buyers Pay Quite Huge Amounts:

Listing agents in metropolitan cities may price a short sale under the market value. It’s a trick short-sale agents use to allure many offers. After all, a price listed on a short sale is a sham. Because you won’t recognize how much a bank will accept till the proposal is agreeable by them. But several banks will reflect a price of at least 90 percent of the market value. Some banks scrap short sales because the deals are unreasonable.

 

3. Short Sale Banks Won’t Agree to An Extremely Discounted Payoff:

Sellers seem amazed by the fact that prices have dropped over five years resulting in 50% or less than the OG value. Banks know declining markets.

 Moreover, banks will carry out their research about the value and sum up a conclusion. The home value is just not based on the amount of the mortgage. It’s based on the present comparable sales too.

These factors suggest that the bank has to accept the market value. If not then the home will go at the price of market value via foreclosure.

 

4. Short Sale Sellers Must Be In Default before the Bank Approving A Short Sale:

Banks favor a short sale grounded on the seller’s hardship and the value of the home. Some sellers work hard to make the mortgage payments each month, yet they are not faulted.

While it is a fact that, true that sellers in default receive instant attention, a seller can also pay a mortgage payment on time every month and still be suitable for a short sale. The seller can buy another house under Fannie Mae’s criteria if they are regular on their loan.

 

5. Agents Get A Lower Commission: 

In the early days, the short sale commissions were not handled well by the banks, between the years 2005 to 2008.

The majority of banks now pay an old-fashioned commission to agents. On February 24, 2009, the Federal National Mortgage Association created a compensation policy. The policy allows paying of the agreed commission by the seller to the listing agent. This commission did not exceed 6%. The borrowers can qualify for Home Affordable Modification Program(HAMP) by the government. They can also apply for Home Affordable Foreclosure Alternatives (HAFA) program.

The borrowers are unable to stop foreclosure or seek a long-term loan modification. This fee structure holds for HAFA short sales as well.

Additionally, refer experts from Elite Properties who can assist you in making the right decision. We are a cash-buying company that suggests we provide fast closings. Call us at 718-977-5462 today.

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