Its no secret that Arizona and housing equals suck ass in 2010. Sure sales are up and kudos to the realtors still in the game and making that happen, but its little secret that the majority of this is Short and Bank Owned sales. The AZ Republic just had an article about people deciding to just walk away from their homes. This article is very interesting and gives you a good look into the psyche of those affected, but it misses out on one huge option: Short Selling.
5 things I learned from my Short Sale:
- Get an Experienced Short Sale Realtor
- Pay the Realtor nothing upfront
- Play for keeps
- Keep your home in decent shape
- Talk to Friends and Family
1. Get an Experienced Short Sale Realtor
First of all make sure you get someone who knows what they are doing. You should expect them to do just about everything for you and that includes negotiating with the bank.
2. Pay the Realtor nothing upfront
Second you should not pay them anything. This is important as there are companies out their trying to charge the seller an upfront fee. This is a sign of someone who is incompetent. When the sale goes through they will get their commission, 6%, split if there are two agents involved. Its sales ladies and gentlemen, once the sale is complete you get paid.
3. Play for keeps
GMAC, my mortgage bank, wanted me to bring cash to the table to close the deal. This makes zero sense to me and it was a good think I had followed Rule #1 and my realtor was talking to them for me as I would have had some spicy language indeed. The reason this is dumb to agree to is that you are not making any money on this transaction so why should you pay anything for it? Turns out you will be loosing your home and be unable to purchase another one for 2 years. My stance was simple, either take the fair market value that the buyer is offering or you can have the keys to my home and foreclose on me. GMAC is smart and took the buyers offer with no extra cash from me.
4. Keep your home in decent shape
Besides getting a buyer to want to buy the home you are also going to have to get the buyers bank to approve the appraisal of the house. I let my pool go total green and we had to do an acid wash to get it approved. That was an unecessary headache.
5. Talk to Friends and Family
Short selling your home is an emotional nuclear explosion. Personally I felt and continue to feel a large sense of failure. The american dream is all about owning the home and here I was selling mine for a loss. You have to have a support group of friends and family to talk with about this or it will eat you alive. I am very fortunate and have great friends and family. Also you will find that many of your friends have short sold their home or homes as well and just haven’t been so public about it…
In the end Short Selling your house is not a great resolution but it is better than foreclosure. There are also no guarantees that your bank will approve the sale since they are the ones who have to write the loss off their books. However with the new homeowners tax refund extension and more pressure from Washington it is something worth considering.
Hate me or love me please leave me a comment. =)