It is said there are 7 deadly sins, I say there are 7 deadly myths being circulated about short sales.

1) Short Sales are impossible and never get approved. FALSE

TRUTH: Short Sales are difficult and you need to learn a new process, but they are NOT impossible. While there are no guarantees in any transaction, more and more short sales are being approved monthly. However, an agent MUST be educated on the process, or it will be nearly impossible. Our success rate is over 90%. I don’t take no for an answer and always look for a solution to any problem.

2) Banks are NOT accepting Short Sales; They are waiting on a bailout. FALSE

TRUTH: The reality is that banks have already been bailed out, and are really trying to do anything they can, within reason, to avoid foreclosing on a property. More banks are aggressively pursuing Short Sales and Agents who understand how to process them. It is strictly business, it costs the bank (in most cases) far less to short sell than to foreclose.

3) You must be behind on your mortgage in order to negotiate a short sale. FALSE

TRUTH: At one time this was true, but today it is not. Today lenders are looking for verifiable hardship, monthly cash flow shortfall or pending shortfall and insolvency. If you meet these three requirements and are in a position where you will soon not be able to afford your mortgage, now is the time.

4) Buyers are not interested in short sales and avoid them. FALSE

TRUTH: Some buyers are not interested because of the time it takes, especially with time constraints like the first time homebuyer credit. On the other hand, many agents are getting calls from buyers who say “I only want to look at foreclosures and short sales.” These have become synonymous, not with issues, but with Good Deals.

5) Listing a home as a short sale is an embarrassment. FALSE

TRUTH: Most sellers don’t want the world to know they can’t pay their bills, but according to recent estimates, 1 in 5 homeowners in the US owe more on their house than it is worth. Even wealthy owners have to stop the bleeding somewhere. Most sellers are to be congratulated for admitting they need help, taking action and finding a professional who can work toward a solution.

6) The bank would rather foreclose than bother with a short sale. FALSE FALSE FALSE!!

Truth: This myth started with collection people working for lenders on commission. The reality is that banks do not want to foreclose on property, it costs too much. An average foreclosure can cost the bank up to $40,000 and they still have holding costs, insurance, etc. and still get less than market value. Do the math, which would you do?

7) There is not enough time to negotiate a short sale before a foreclosure. FALSE

TRUTH: The foreclosure process is lengthy. Almost all lenders will stall a foreclosure with a legitimate contract for short sale.