Most of the same considerations you would have when selling under normal circumstances still apply: De-clutter, touch-up the paint, keep the landscaping tidy, etc. Here are some of the extra issues that Short Sellers face and some questions that often ask …
What should you look for in a Listing Agent?
More than anything, you need an agent who has a decent amount of experience with short sales and has shown exceptional market knowledge. Fancy fliers, glamor-shots, and a "neighborhood specialist" will not do you any good in a short sale. And do not hire a "Short Sale Expert" just because they call themselves one.
A great Short Sale Listing Agent will have:
- Good Short Sale experience. Seeing as how we've been doing them for 4 years, an agent you hire should have done at least 20 or so successful short sales. Be wary of someone who says they've done hundreds … many of them will not have the time or inclining to give you the extra effort when you need it most.
- Excellent industry and market knowledge. Short sale transactions are so much longer and more complex. It looks like there are a lot more things to go wrong. A good short sale agent needs to understand appraisals, different lending standards and practices, inspection and repair issues, and generally the kind of person who can come up with the solutions needed to keep a deal moving forward.
NOTE: Some agents hire outside short sale negotiators to process the transaction with the Seller's bank. If you are hiring an agent is going to effectively outsource their work, it is really this other company you are hiring. Ask tough questions accordingly. The biggest concerns here are that your listing agent may not be engaged and working as hard to keep your deal together AND some of these outside firms may charge you additional money.
Should you stage or spend any money on repairs?
No and No.
Do you have to be behind on your mortgage payments?
This is one of the most common misconceptions about short sales. I have personally closed short sale transactions where the sellers never missed a payment.
The issue is one of hardship. The bank will want to see that you have a legitimate reason why you can not continue making your payments. If you have a legitimate, provable hardship that justifies why you can not continue to own the house, then you will be a great candidate for a short sale even if you are current on your mortgage. On the same note, exaggerating your pain by not making your payments when you still could probably not going to help you any. The bank will see your pay stubs and your bank statements anyway.
Obviously, credit scores are a big concern for Short Sellers. In theory, a Seller with zero or very few missed payments will have less credit damage than a Seller with many months of missed mortgage payments.
Having said that, …