What is a Quick Sell?

In real estate, a short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor. The home owner sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. A short sale is done to prevent a home foreclosure – a bank will choose to allow a short sale that will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on the credit history. Also, a short sale is typically faster and less expensive than a foreclosure.

Lenders have a loss mitigation department which deals with short sale transactions. Typically, lenders do not accept short sale offers or requests for short sales until a Notice of Default has been issued or recorded. Lenders have to approve of any buyer’s or listing agent’s commission in advance. Junior liens may need to approve of the short sale. Frequent objectors to short sales include tax lieners and mechanic’s lien holders.

It is common for a lender to omit updating the zero balance and settlement option on the mortgagor’s credit report, or even flat refuse to do so “due to their financial loss.” The forgiven amount is considered as income for the borrower and as such liable to be taxed. However, after the signing of The Mortgage Forgiveness Debt Relief Act of 2007 by President Bush, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a solution beneficial to both parties. This protection is limited to primary residences so consult with a tax advisor to ensure you qualify.

What is the best way to quickly sell a house without lowering the price any more?

There are 3 major factors in a home sale, price, condition, and location. You can only control the first 2 obviously. If your house has been on the market a long time than you need to revisit the ones you control. It sounds like you have already reduced the price so you need to consider the condition. There is no “silver bullet” in real estate so it is hard to say more without knowing more. Check your pricing compared to SOLD comparable homes to yours, if you are working with an agent ask them to take you to see active comparable homes to yours so you know what the competetion is and how they are priced and staged. That way you can do what you can to be better than your competition and you will know you are priced well so an appraisal should support the value. If you have not had any showings then unfortunately it is probably price. If you have had a good number of showing then it is probably condition. The average is about 10 showings equals one offer. Remember too that value is ultimately determined by the sold comparables and WHAT A BUYER IS willing to pay. 

How can we make a quick sale for our home? Use a realtor or for sale by owner?

Our home has been on the market for 7 months now. At first we had an agent from Remax for six months and now we signed with an agent from Exit. We have had no luck what so ever. They don’t seem to be avertising very well so we are wondering if we should just go ahead and list for sale by owner and we can do all the advertising ourselves. Not to mention we could lower our asking price a good $10,000-$15,000. We bought our home through for sale by owner so we know a little bit about the process. We are not looking to make a huge profit off of our home with the way the market is, we want to move out of state and are only looking to get a price in which we can pay off our remaining balance on our loan. We did lots of remodelling already and always try to keep it nice and tidy but this house will not sell.

Try the FSBO route and see how it goes, you can always go back to a realtor. Buyers are often struggling to come up with the cash for a down payment, so consider creative ways to help them conserve cash. If they express needs during the showing, a remodel of a room, or redecorating, consider offering to prepay work with a contractor prior to closing in exchange for a full price offer, vs the normal %discount most people are accepting in your area off list price. Price the house 5 to 10k more than you are willing to take, and indicate willingness “to work with” a buyer who seems interested but wants something done to the house to make it just right for them.