Common Real Estate Short Sale Misconceptions

1. The bank owns the home – Nope! The home owner owns it until the bank takes it in foreclosure (or deed-in-lieu).
2. All offers on the home go to the bank – Actually, by Georgia Real Estate Law, all offers need to go the seller.  If the seller decides to send them all to the bank or just one, that’s up to the seller.
3. The bank pays all the fees – This is tough one.  Remember, the bank is lowering their payoff to allow the seller to pay the fees.  It’s a tough concept but a key one.
4. The bank pays all the fees - I know, we just wrote that, but in this case, the bank will not allow ALL fees, all the times.
5. The bank is the owner of the “note”- Actually, in most cases, the “bank” isn’t the bank at all, they are rather a Mortgage Servicer who collects money for the bank.  Think “property manager” for the landlord and you have some idea.
6. Short Sales and Foreclosures are equal – I won’t even cover this here, but check out what we wrote 2 years ago.
7. You Must Have Lost Your Job to qualify – Actually, you just need a “hardship” which could simply be, “I could not find a renter.”
8. All Short Sale Sellers are people in major distress – If you thought that then you’re clearly not in reality.  The truth is that most Georgians who purchased in the last 3 years would all be candidates for successful short sales.
9. There Is Such A thing as an “Approved Short Sale” – With one or two exceptions, there is really no such thing as an approved short sale.  Sorry folks.  You can have a short sale approved, but it typically will tell you what buyer you have to close with. So if the buyer walks… you’re out of luck.
10. Short Sales Take Forever – In most cases this one can be true. However, if you have an agent on the buyer’s side and on the seller’s side then from start to finish, they shouldn’t take more than 60 days.
11. Short Sales Are A Hassle – Again, like the previous one, it’s mostly true due to inexperienced agents.  Deal with an agent that knows what they are doing and then it’s only bank dependent.  (See Suntrust)
12. There is NO such thing as an “approved short sale” - No, I’m not naturally wishy-washy.  In most instances when we get an approved short sale and the buyer “walks” we immediately know what the bank will “take” and our time to renegotiate with the bank is dramatically reduced.  However, keep in mind that most banks will still require you to go back through the process again (if you are the seller).
13. Short Sales Are Not The Best Deal on The Market – That’s true.  The best deals on the market are ones that can only be purchased via cash and have a set criteria to look for.  Experienced investors and renovators like Brian & Peter know how to get the BEST deal, but Short Sales are close second.

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