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About Dick Dennis
Expertise
With more than 37 years as a real estate broker, I can solve most any problem presented. If I can`t, I do my research. Problems with mortgages, trust deeds, foreclosures, odd ways of conveying titles. Most any good Realtor can answer questions satisfactorily, but I answer questions that most cannot. Also, ask about my hard-copy newsletter.

Experience
Problem solving since 1980

Organizations
National Association of Realtors

Publications
Publishes The Landed Gentry, guest writer in Who's Who in Creative Real Estate, First Tuesday, Financial Freedom and many newspapers

You are here: Experts > Shopping > Home Buying/Selling > Buying or Selling a Home > Short Sale Questions

Buying or Selling a Home - Short Sale Questions

Expert: Dick Dennis - 11/6/2009

Question
QUESTION: Hi. I am hoping you can help me with some questions. We are currently trying to sell our house and we have to do a short sale because it is appraised at over $50,000 less than what we bought it for. We would prefer not to even sell our house right now but my husband is in the military and he is due to transfer out next summer.

Anyway our house has been on the market for almost a month now and we have not had even one person come to look. I am thinking the problem is that when people find out it is a short sale, they will not even bother coming to look because they know short sales can take a really long time. So that is one problem we are having... The other is that we dont even know for sure that we will be able to get a short sale approved.. Our bank has just told us that we have to wait until we have a buyer and then submit the paperwork for a short sale.

Also, I am hearing that you are not likely to get a short sale approved if you are not having major financial problems. We are doing ok, my husband is very good with budgeting our money.. Our mortgate payments are on time and we dont have outstanding bills. So we are wondering if we would even qualify for a short sale in the first place.. Unfortunately we cant get any info from the bank about if we would or not, so this is a really frustrating situation.. This is why I am trying to find out what would be the best next step for us. Should we just wait until we get a buyer (if we ever do) and then just hope we get a short sale? Or is there anything else we can do right now to help ensure that a short sale would be approved?

This is a really tough situation and I am not quite sure what to do next. I would like to rent out our house but my husband doesnt like the idea at all since we would be living out of state and would probably lose a couple of hundred dollars a month, especially since we would need to get a property management company..

So, if you have any advice for us on the short sale situation, I would really appreciate it. Thanks so much for your time!!

Jennifer

ANSWER: Do I get the impression, Jenn, you are trying to sell the house on your own? Or do you indeed have a Realtor helping you find that buyer? If you do have a Realtor, you should be asking him or her these questions. A knowledgeable Realtor would have been able to answer them with no problem.

However, I will do my best to help you from this distance. But I don't want to be stepping on your Realtor's toes. But from what you have said, your credit is too darn good! Banks have problems with dealing with homeowners who are not in a distressful situation other than that they paid too much for the house.

I had a client or two who was good with their payments, but they had to ruin their credit a little to show the lender that they needed to sell their houses via short sale. They stopped making payments and this showed the lender that they were getting into distressful situations.

But in your case, you did not lose a job or income, or had a medical emergency, or divorce, thank God. Your lender will find it hard to understand why you have a hardship (you have to write a hardship letter to the lender in the process). Yes, the lender seems to be forcing you to ruin your credit.

At this point, I can tell you what another one of my clients did. They took advantage of their good credit and went out and bought a house into which they moved BEFORE they sold the one they had. They THEN let the house they were in go back to the lender. I imagine it didn't do their credit standing any good, but at least they wound up in a house with a loan that was below the value of the house (they bought a foreclosure).

Or you can just sit and wait until someone makes an offer on your house, which may not ever happen. Why? Because Realtors show their clients houses that they know that will sell. My guess is that your price is too high. Maybe, just maybe someone will offer to buy your house and is willing to wait for the time required by a short sale. I do wish you well, Jenn.

Dick Dennis

---------- FOLLOW-UP ----------

QUESTION: Thanks I really appreciate all of the info. We do have a realtor but she really cant give us much info on short sales or if we will be approved, so I am asking some different realtors..

Answer
Well, then, Jenn, I recommend you see and talk to her office manager, most likely the broker for the office. That person should be able to answer the questions you have. I am positive there is a broker in your town that can answer your questions for you. Unfortunately, not all (in fact, a precious few) Realtors know how to, or are willing to, do anything that requires a short sale. You take care.

Dick Dennis

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