A couple of days ago, someone found this blog using the search term “do it yourself help +short sale“.
Here’s the deal. If you want to “go FSBO” — ie: sell your home “For Sale By Owner” — more power to you. As a real estate agent, of course I’d prefer for you not to go that route. I don’t think selling your single largest asset on your own is a good idea, but that is a whole ‘nuther post.
But doing a short sale on your own?!? That’s a really scary proposition. Short sales (where a home is sold for less than what is owed on it) are jammed packed with potential pitfalls, and really need to be handled by someone with experience doing them. Even many agents out there have never done a short sale. They are painful to the point that every time I do one I swear it will be my last.
And for the life of me, I can’t understand why someone would even consider a “FSBO short sale”. When homeowners FSBO, invariably they do so because they think they will save on real estate commissions, thereby putting more money in their pocket.
But a short sale is a zero-sum game for the seller. In a short sale situation, the seller isn’t going to walk away with a dime. They can’t pocket a plug nickel. Think about it, the lender is taking a loss of thousands (often tens of thousands) of dollars. Do you think they are going to let the seller take away any money?
Reducing (or eliminating) the commission on a short sale only puts that money in the lender’s pocket, not yours. (Hence the reason many lenders whack the commissions on short sales from the get go.)
So why in the world would anyone even think about doing a short sale on their own? Maybe I can see trying to offset some of the forgiven debt with a commission savings, but with the recent passage of the Mortgage Forgiveness Debt Relief Act, that doesn’t make sense — the potential tax liability is gone. I don’t think getting the bank a few extra grand is going to salvage your credit score — it’s going to get hammered regardless.
A do-it-yourself short sale just makes no sense, unless I’m missing something completely.
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