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MYTH: I must stop making my mortgage payments before the bank will approve a short sale.

TRUTH: You do not have to stop making payments on your home in order for the bank to approve a short sale. What the bank needs to see is a solid reason why you are unable to continue making your monthly payments and/or must sell (loss of job, relocation, divorce, etc.). Due to the current market conditions, the banks generally understand why the short payoff is being requested – whether you have missed payments or not.

MYTH: If I am doing a short sale, I am in foreclosure or pre-foreclosure.

TRUTH: A short sale is simply requesting the bank to accept a total payoff of your loan for an amount less than what you owe. You are only in foreclosure when you receive the foreclosure notice from the bank.

MYTH: I have a second mortgage or home equity line so I can’t do a short sale on my home.

TRUTH: The majority of people we work with have both a first and second or home equity line. In this situation, the first mortgage generally approves an amount for the second and we negotiate between the two. The second mortgage company is accustomed to taking a much lower payoff.

MYTH: I will receive some money back at closing.

TRUTH: When you sell your property as a short sale, you are not entitled to receive money back at closing because there is no equity in your property.

MYTH: The bank will not pay the commission for my real estate agent and/or the costs of listing the property with a real estate agent will be passed on to me.

TRUTH: A real estate agents commission is taken out of the banks proceeds at close of escrow. There should never be an out of pocket expense for a seller who lists their home as a short sale with a real estate agent.

MYTH: Short sale homes are priced lower than other homes in my area.

TRUTH: Short Sales are priced in line with other comparable properties in your area. Your mortgage company will do their own version of an appraisal of the property to make sure they are getting a fair payoff on the property. Length of time on market, condition of the home and how quickly the Seller needs to close are all conditions that affect the price of every listing – short sales included.

MYTH: I have a foreclosure date approaching so there is not enough time to do a short sale.

TRUTH: Because it is generally far more expensive for the bank to foreclosure on your home than to work with us on a short sale, we can postpone the sale on your home in most cases while we are marketing and/or negotiating your short sale.

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