7 Myths about Short Sales
Myth 1: Lenders will not accept short sales unless the client is behind on their payments.
* This is the #1 misconception that we hear and it's simply not true...in most cases
Myth 2: Lender will not accept an offer that is below market value
* Market Value 200,000, current owner owes 275,000, the bank won't accept anything less than 200,000... Simply not true. Truth is lenders will accept offers that are 15-25% below market value.
Myth 3: Lender will never accept 20,000 on a 100,000 2nd loan.
*Not! In Texas the 2nd lien is wiped out completely, 20% of something is better than 100% of nothing. Prove your case.
Myth 4: Bank cuts your commission to 4% because investor only allows this amount.
* Remember, it's not the bank's place to specify commissions. They can either accept or decline an offer, but if you stick to your guns when you know you have a good offer, more often than not they'll accept your contractual agreemnt of 5% with the seller.
Myth 5: Lenders rather foreclose than accept a short sale.
* Correct paper submission is key to proving your case. MLS comparables of foreclosures in area. Most agents dont know the correct way to negociate properly and who is on the other side of the phone. In today's market 09', lenders don't want to hold on to anything. Know this "first loss is best loss".
Myth 6: Bank needs to listed 90+ days before a short sale can be presented.
* Banks no do care if the house is listed at market value. In most cases they dont even care if its even listed at all. They just want to make sure your offer submitted is at or close to the BPO value they have.
Myth 7: Its not a short sale without an offer and HUD net sheet.
*Yes without a sales contract and HUD 1 net sheet your file will not be submitted.