A Short Sale in Utah County Can be Painful.

First I would like to start with the definition of a short sale:

A short sale is a sale of  real estate in which the sale proceeds fall short of the balance owed on the property's loan.  It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer cedit report outcomes for the borrower.

If you are looking to be placed on a list of available short sales that come available in Utah County let us know.  If you are considering doing a short sale on your home and would like to get started contact us.  If you are in the market for a home or are trying to find a way to sell your home and feel you are upside down, you might think that the best option is a short sale rather than a foreclosure. This usually reduces the damage made on your credit report.  A seller that is doing a short sale may not ever collect any money at a closing.  All available proceeds are sent to the lender. 

I'd like to go over short sales first because there is definitely more confusion over them, more contract issues and more complications with getting them closed than foreclosures. In my experience, they are more difficult than most other transactions right now. With all of that said, they can also represent an excellent value - but not all the time and not for all people. To buy or sell a short sale, you need to have time. Lots of it and often times it is an indefinite amount of time. They typically take 3-4 months to close, but, can take 9-12 months. I have seen some short sales here in Utah County take over two years.  It is common for a bank to completely ignore a short sale and head directly into foreclosure.  

Short sales have been around for a long time. That's not new. What is new is how it's being used by homeowners in a declining market and what constitutes a hardship. There are now more homeowners applying for a short sale than ever before and for many banks the prospect of foreclosure may be more expensive than the short sale so the bank may be inclined to accept a short sale.  We are currently experiencing about 25% of the homes for sale in Utah County as short sales.  This is an incredible about of homes roughly around 1,000.  I remember doing my first short sale in 2001.  It seemed strange negotiating with the bank for a payoff.  The bank was in Flordia and seemed very angry and rude.  It was quite challenging.

The fastest I have closed a short sale is about 30 days.  It is very rare for a short sale to go faster than 30 days.  However, the typical short sale lasts several months.  Today the process is very different and every lender has a different timeline and slightly different method. Many attorneys claimi to represent sellers to help get a short sale approved faster than can be done by the homeowner - I'm a bit skeptical, but, it's probably effective for some. It's just that there is no reason for it when a short sale expert real estate agent can easily handle it for you just as easily without injecting a third party into the process.

There are also real estate agents in Utah County who claim to be able to help other agents with just the short sale approval process - another middle man to me but maybe more effective as they are really just trying to help the listing agent get the short sale process moving more quickly.  According to the state a licensed real estate agent must handle the negotiations of a short sale with the bank.  Anyone negotiating a short sale other than a licensed real estate agent or attorney may find themselves in trouble with the division of real estate for practising without a license.  

To be effective, you need bank forms and contact numbers that only come with experience in the short sale business. The number of short sales in the current market is so high that many lenders want an offer on a home before they will even consider a short sale. This is difficult for many to understand because you don't actually know for sure what defines a "hardship" so there can be uncertainty with whether a homeowner will ultimately be approved. With experience, we know what some things are that constitute a hardship, but, as a seller, you need real guidance on this. You will need to call me and talk about your specifics if you want me to explain what does and doesn't constitute a potential hardship.