The real truth behind selling your home for less than what you owe

By: Emil Hartoonian

I would like to begin a long overdue series of informative blogs around the mystery of what almost every homeowner has discussed in some shape or form within the walls of their property, short sales.

Let me first emphasize the fact that many agents, both seasoned and new take the liberty of discussing what a short sale is, how it works and what, if any, ramifications are out there. To set the record straight, it’s truly one thing to talk about and give advice about short sales, it’s another to have actually completed them and dealt with the countless challenges each uniquely entails.

I myself have completed nearly 100 short sale transactions, including those of my own clients and those that co-agents have brought me in to deal with the banks and ensure the transaction is handled with knowledge and experience. I can confidently state that no two transactions have ever been completely alike. Having dealt with every major captive and private lender known to have originated or serviced mortgage loans at some point, it is at the heart of this blog to insist that every individual who feels a short sale is an option consult with the highest level and proven track record of experience. One would never commit their health to second best care, neither should one treat their real estate representation any different.

A short sale is in fact no different than any real estate sale transaction with the one contingency that the price must be approved by the lender(s) holding interests in your property. The owner on record remains as involved with the transaction and sales process as a traditional sale. The difference is the seller is not allowed to net any proceeds in a short sale while the bank accepts to take a loss of their balance owed.

Simply stated, the successful short sale lies in the product of a few key elements: Can the seller walk away from the property without being held liable for any balances owed to the lender; can the seller avoid the damages of a foreclosure on their credit profile successfully; can the seller walk away without being responsible for closing costs including commissions, escrow or title insurance costs?

Although it may seem like a short sale transaction entails some general procedures and in fact it does, no two short sale negotiations have ever been similar. Fact is every file is different based on the fact that every borrower’s financial circumstances and hardship is also unique. I take great care in structuring financial packages and short sale requests to account for the homeowner’s personal situation. This in itself is a very critical layer of the short sale process and requires experience and great attention to detail. It is for this reason, I have successfully accomplished the closings for many transactions, not to mention having built a reputation with many lenders as one who understands both the dynamics of short sale processing and the real estate sales transaction.

In the next several discussions, I will review some specific experiences around the largest banks and short sale process. Until then, have a wonderful and safe holiday.

EwingSIR does not guarantee information contained in this blog, readers are encouraged not to rely solely on this information and to do their own independent research of facts contained herein. Blog information was obtained from independent sources that we do not endorse, and we do not investigate this information for accuracy.