Selling Via Short Sale ~ Any Advice?

kellyfootaNovember 28, 2011

In 2009 my husband, our family's primary breadwinner was laid-off and for the next two years he was underemployed. To stay afloat and up-to-date with all payments, we emptied all of our savings (including retirement). In early 2011 he received a good job offer (more in line with the income he was making before being laid-off) but it was in another state. We tried selling our home for 6 months but it was overpriced for the market because we are underwater. It was incredibly expensive (paying rent and commuting for him) and stressful for our family to be apart, so we rented the home out and rented a home in the state where my husband's new job is in. The highest rent we could get doesn't even cover our first mortgage, let alone the cost of the second mortgage, the real estate taxes and repairs and upkeep. To boot, our renters just informed us that they purchased another home and plan to move out in February (their lease is until June) They promise to continue to pay the rent, but we are at their mercy. We have decided to try a short sale. What the realtor is suggesting as a market price would most likely cover the first mortgage but leave the second with little to nothing. We are current on all of our bills, but if the renters flake on us, we will have to stop paying the mortgages. Any tips with negotiations with the banks?? Any similar experiences? Thanks in advance!

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Make sure you hire a realtor who has success with short sales. IF a realtor tells you, "the atty will handle it" find another realtor. These things take constant contact with the bank and incredible diligence and persistence. You will not get an atty who will call the bank every other day to make sure things are on track. If you miss one deadline with the bank, the entire process starts all over again. It sounds like you have all of the hardship necessary for a shortsale, however with a second mortgage, things are alot more difficult. Good luck to you.

    Bookmark   November 28, 2011 at 9:15PM
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I'm sorry you're going through this. Hopefully you'll get some good advice on here.

    Bookmark   November 28, 2011 at 11:32PM
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What Linda says. Agents who use third party attorneys to handle their short sales are lazy and misinformed and not representing their seller well.
I will leave the details out, but take Linda's advice here.

    Bookmark   November 29, 2011 at 7:11AM
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No personal experience, but things I've heard from others on the financial side:
1. If you want the bank (either of the mortgage holders) to write off the mortgage balances over and above the sale price, they will not do so unless you're behind on your mortgage payments.
2. Getting behind on your payments and doing a short sale will put a pretty hefty ding in your credit that it'll take a few years to heal from.
3. Banks (especially the 2nd mortgage holder) will sometimes negotiate something between you having to sign a note for the whole difference in sale price and mortgage and them forgiving the whole thing.

Good luck. It's not an easy process.

    Bookmark   November 29, 2011 at 7:51AM
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