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Short Sale Info for Myrtle Beach, Conway, Aynor, and Surrounding Areas

The term “Short Sale” is a relatively new term to the real estate world, but it is here to stay for a while. In our areas of Myrtle Beach, Carolina Forrest, Conway, Loris, and Aynor areas of South Carolina, this term will be heard for a long time to come. The big real estate boom that this area encountered a few years back and the crash that followed caused many homebuyers to owe more to their lenders than their home is worth, and are now forced to try and sale it “short”. Although this sounds terrifying, it can have positive outcomes for both buyers and sellers.

Sellers can possibly avoid the dreaded “F” word. That means foreclosure for some of you that may still be wondering. Buyers can also benefit from this by receiving a great bargain price on a home that is still in great condition, unlike some of the foreclosures I have seen. However, buyers should be aware that this process can take as long as 3 months from contract to close. Therefore, if you are thinking of buying a short-sale or attempting to sell your home and think you may need to try doing one, you will need the experience of an expert. Our agents are trained on how to deal with the banks and get the best results possible for everyone.

Q: What is a Short Sale? Should I do one?

When you decide to use a short sale to prevent foreclosure, you should understand that the sale must have the lender’s approval and that lenders don’t always agree. What the lender is doing when they accept, is permitting you to sell your home for less than you owe them and taking the loss themselves. If they do go along with the short sale, it will relieve you of the burdens as well as the costs, emotional strain and embarrassment of a messy foreclosure process.

Q. How do I pursue doing a Short Sale on my home?

Well, it should be known that every lending institution has different policies regarding short-sales and how they are handled. You, the homeowner, along with the counsel of an expert realtor who is very knowledgeable about dealing with these particular situations, should contact the loss mitigation department of your lending institution to find out exactly what they will need from you and where you should send it. However, there are a few things that most all of them will require:

1. A cover letter explaining why you cannot continue making the payments on and stay current on the mortgage. Tell them what financial hardships you have encountered: lost jobs, pay cuts, health problems, etc. Also, mention in this letter why it is not possible for you to sell your home for the amount owed on it. (Note: Some lenders are starting to allow borrowers to do a short sale who are not even behind on the payments)

2. Provide comps of homes that have recently sold in the area. Include pictures. (Note: It is a good idea to mention to them that you Realtor put these together for you, and they should.)

3. Provide them your realtor’s contact information and a consent form allowing the lender to share your financial information with the realtor. ( Most lenders will send you one of these to fill out)

4. Send them a net sheet or closing statement showing them the amount that you want to change the asking price to, minus all the closing costs, taxes, etc (Your realtor should help prepare this for you)

Q. What happens to the homeowner's credit?

Although that it is heavily debated by many, it is our experience that a short sale is far less destructive to your credit rating than a foreclosure, as it is supposed to be listed as a “settled debt” on your credit report. However, it is still harmful to your credit. Different lending institutions have different policies regarding this process and all borrowers pursuing a short sale are considered on a case-by-case basis. Therefore, you should always consult with an experienced agent and a lawyer as well as your lender whenever you consider doing a short sale.

The lender could also go after you to collect the difference between the short sale price and what you owed them by putting a deficiency judgment against you. You, the homeowner, want to get them to agree to accept the payment in full without pursuit of any deficiency judgment. This is where the knowledge and experience of a knowledgeable real estate professional comes in handy. Our agents have undergone extensive training to become experts on negotiating with banks to get homeowners the best possible deal with their lenders.

According to your lender’s cooperation and attitude towards your specific situation, it is possible that your credit can stay relatively unharmed, although this is highly unlikely, because the reporting of a short sale or a deficiency judgment would both damage your credit. The trick would be to try and negotiate with the lender and convince them not to pursue either of these. If this is not possible (probably not), then you should try and get them to drop off the judgment (much more feasible). If you think you want to take the first step towards doing short sale on your home, consult one of our distressed property experts today.

Also, please remember that the writer of this article is a real estate professional from New Wave Real Estate, LLC and is in no way trying to offer legal advice to anyone. Any homeowner should do their own due diligence and talk to a lawyer about their options and the possible implications of any actions that they may decide to take. Although we are highly trained and experienced real estate professionals, every situation is different, and we do not claim to have every answer. What we do know is how to help you find them and work as a team along with you and your lawyer to negotiate with the bank and produce the best possible situation for everyone involved. If you choose not to consult an attorney, you have this right. However, let it be known that our company recommends that you should always consult an attorney before making these kinds of decisions.

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