The Long and Short of Short Sales

Even though home prices in the Triangle haven’t fallen nearly as much as the 1/3 national average, there are still significant numbers of  homeowners in our area who owe more than their home is worth. Some of them are “underwater” because they purchased at the top of the boom.   Others took their equity out and spent it, back when credit was easy and appraisals were generously high.   Either way, underwater is not a happy place to be if a homeowner needs to sell.


For the underwater, or upside-down, seller, the two most common alternatives are to let the house go into foreclosure, or try for a short sale.   Foreclosure is not the better choice but, for the seller, it’s the easiest.   All he has to do is .. nothing.  The foreclosure will happen all by itself.


Unlike the foreclosure, the short sale requires effort on the seller’s part. There’s no automatic right to a short sale.  The bank is going to want to see the seller’s financials, and it’s also going to want to hear that an involuntary hardship brought him to the point of needing a concession from the bank in order to sell.  If there is a second mortgage, then both banks have to agree to take less than they are owed.

And then, after all that, the seller still needs a good listing agent to get the home marketed, under contract, and safely delivered to the closing table!

The sooner a homeowner who is struggling gets the short sale process started, the better — because it’s only the money that’s short.   Short sales are well known for taking a long, long time.