When you want to put your Michigan home for sale you may find out that you owe more than it can be sold for. You may be going through a divorce or have lost your job. You can't afford the home or need to downsize. But what can you do? Do you put your Michigan home up for sale or do you just let it go into foreclosure?
You may want to contact your bank. A short sale is where the bank accepts less than what you owe on the mortgage. For example you may owe $270,000 on your 2200 square foot Livonia home. Many 2200 square foot Livonia homes are selling in the $215,000 to the $225,000 range. So the bank would have to either accept less money than what you owe or take the chance of getting back as a foreclosure.
Unfortunately the issues with a short sale is that many banks don't have enough qualified personnel to handle all the Michigan short sales. There are so many Michigan Homes for sale that just can't be sold for what is owed on the home.
The two major reasons you may not want to get involved with a short sale are. Many of them never get closed. Many banks don't accept the offer. Many times they are so far removed from the Michigan real estate market that they don't know what a Michigan Home for sale is worth. The bank rejects the offer and eventually it becomes a foreclosure.
The other issue is that it takes weeks for a bank to accept or reject an offer. Sometimes you won't hear from the bank in 4-6 weeks. Most buyers don't want to wait that long.
My thought whether you are buying or selling is to stay away from a short sale. Too much trouble to put your Michigan home for sale as a short sale for the trouble and grief involved.
For more on Michigan real estate go to my other websites. www.RussRavary.com or www.DetroitMichiganRealEstateHomes.com You can search over 60,000 Michigan homes for sale or get great buyers tips and seller tips
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My Month of April quote:
"Sometimes the only way to get to the far shore is to lose sight of the shore you just left"
Russ Ravary
"helping make your move easier"
your local Metro Detroit Realtor helping clients like you sell and buy homes through out the entire Metro Detroit suburbs. I love showing and selling Oakland County and Livingston County Lake front homes too.
Hear...hear!!!! I totally agree with you. A lot of times it is not in the Seller's best interest. It might be better for the Seller if the property forecloses instead. There are a lot of agents out there suggesting to their sellers to try it and taking on Short Sale listings before they really know what they are getting into.
I was not familiar with the term 'short sale'. I think I understand now. Thank you.
Would the banks not consider refinancing those homes, for less interest, in order to allow the sellers to continue making payments they can afford, and by doing so, the seller doesn't lose the house, and the bank continues to get paid?
Sylvie,
Sometimes the bank will negotiate for a fixed rate but not lower the rate below the market rate. And they will not lower the amount owed. Unfortunately the bank personnel that handle the short sales don't accept many offers. Many times the home will get foreclosed and then sell for less than a rejected short sale offer.
Russ, I wasn't thinking necessarily below the market rate, but I thought for sure, some of those people MUST be paying a lot more than they would pay now, since rates have gone down ...
If the bank isn't going to get all their money, you would think they would be willing to renegotiate at a lower rate (than the seller originally bought at) ... if you really think about it, it's better to get a seller to hold on to a property for another 10 years (paying interest all those years - even if a lower amount) ... than to have to foreclose and still lose... no??? I just don't understand why people are forced into these situations. They don't benefit anyone. :/
Sylvie I agree with you but the banks have to be responsible to shareholders and protect themselves from lawsuits. What would happen if they agreed to it for one person and not another. What happens if it was another race, another religion. A legal nightmare for the lenders by doing for one and not for all.
I understand. I am just wondering how happy the shareholders are right now...