7 Dangerous Myths About Minneapolis Short Sale Duplexes
In today’s real estate market, many duplex home owners feel like Sisyphus: doomed to roll the boulder of their property up a hill over and over again only to watch it roll back down.
Many are realizing they either owe more on their rental property than it’s worth or, for reasons of unemployment or mortgage resets, can no longer afford the payments.
As a result, they often discover they may be facing a short sale.
Of course, with anything that’s new and unfamiliar, there are a number of misconceptions and myths about the process. According to the Distressed Property Institute, these include:
Myth #1- The Bank Would Rather Foreclose Than Bother With A Short Sale
The truth is banks nearly always lose more money on a foreclosure than a short sale. This myth is so pervasive that many banks, investors and even the federal government have stated that if someone is qualified for a short sale, the deal must be considered.
To qualify, the duplex seller must be able to demonstrate financial hardship, monthly income shortfall or insolvency.
Myth #2 – You Must Be Behind On Your Mortgage to Negotiate A Short Sale
While this may have been true in the past, lenders today are looking for a pending shortfall, insolvency, monthly cash flow shortfall or a verifiable hardship.
Myth #3 – There Is Not Enough Time To Negotiate A Short Sale Before My Foreclosure
Foreclosure is a process. In Minnesota, it can take up to a year; with six of those months occuring after the sheriff’s sale.
The foreclosing bank or home owner’s association can stall a foreclosure up to the last day of the redemption period.
Myth #4 – Listing My Home As A Short Sale Is An Embarrassment
It is understandable to have reservations about telling the world you owe more on your duplex than it’s worth. But you’re not alone. In fact, it’s estimated that one out of every eight homeowners in the U.S. is in the same situation. What’s more, forecasts predict that in the next few years, 40-60 percent of all U.S. sales will be short sales or foreclosures.
Myth #5 – Short Sales Are Impossible And Never Get Approved
Are short sales more difficult? Yes. Is there a learning curve for the property owner? Yes. Are they impossible? Nope. Agents who have earned the Certified Distressed Property Expert (CDPE) Designation are getting thousands of short sale approvals every month. These Realtors have undergone extensive training in methods to help distressed duplex owners and process short sales.
Myth #6 – Banks Are Waiting On A Bailout and Not Accepting Short Sales
OK, can any of us count on Congress to pass legislation? Probably not. And banks know this too. Consequently, banks are becoming more aggressive in pursuing short sales and working with Realtors who know how to process them. In fact, Freddie Mac recently stated the organizational goal of “eliminating distressed assets through modification or short sale.”
Myth #7 – Buyers Are Not Interested In Short Sale Properties
For Minneapolis and St Paul duplex home buyers, short sales and foreclosures are synonymous with “good deal”. In fact, in the last year, many of the rental properties in the Twin Cities that have been the best value for the price have been found in the short sale category. Listings with an experienced agent educated in the short sale process ensure a greater chance of a contract being successfully negotiated on a property.
If you’re wondering whether a short sale might be the right move for you, please call or email me. As a Certified Distressed Property Expert, I’d be happy to explain your options.