18th Wednesday Apr 2012

5 Biggest Los Angeles Short Sale Myths

Written by: Vanessa
Comments: 0
Category: Real Estate Bits

It’s unfortunate that many property owners aren’t correctly informed about short sales. If I had to choose between a foreclosure and a less damaging short sale, I’d happily opt for the short sale in a heartbeat. My #1 piece of advise to homeowners in distress: Don’t wait until the last minute. A short sale can be relatively easy, and possibly the best decision of your life, if dealt with pragmatically. If you see yourself losing your home, reach out, it’s never too late. The road ahead isn’t as bleak as you think.

Myth #1: Banks want to help you.

Fact: Most banks won’t entertain your short sale request unless you’re already in a distressed situation (i.e. several missed payments). The banks will say this isn’t necessary–but it is. I know this will be controversial, but the only true ally you’ll have in this process is your trusted agent.

Myth #2: Short sales are harder if there are multiple loans.

Fact: It doesn’t matter how many lien holders there are. The approval process is nearly identical because short sale applications will be have to be sent to each of them.

Myth #3: Your credit won’t be destroyed.

Fact: Your credit will be impacted by missing payments and the short sale posting. However, it won’t be as bad as a foreclosure. Assuming you’ve kept up will all other creditors, you can get a mortgage again within 2 years. Foreclosures stay on your credit for 7 years and you’ll end up waiting up to 72 months before you’re offered a reasonable loan.

Myth #4: Short sales take forever to get approved.

Fact: Short sales can take some time, but many things have changed. The major banks (BofA, Wells, Chase, etc.), while still crappy, have significantly streamlined the approval process. If you have an agent who knows what to do, it’s totally reasonable to get a short sale approved and closed within 45 days–80% of mine do.

Myth #5: Any agent can do a short sale.

Fact: This is 100% not true. If you’re considering a short sale, it’s very important to have an agent who knows what they’re doing. There are so many moving parts involved that require experience and skillful negotiation. Having incompetence at the wheel can mean the difference between a firecracker on your credit report vs. a full on atomic bomb.

I’ve successfully negotiated and closed dozens of short sales, including many that seemed like total lost causes. It’s never too late to give it a shot. If you need help, guidance or just have questions no one can seem to answer, feel free to contact me anytime.

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