Last week we closed on a short sale here in Virginia. Our house sold for about 158,000 dollars less than we paid for it. It lost that much in 4.5 years. Some lessons learned:
* The sale took about six months to complete. The process restarted at least once and the closing date was extended a few times.
* The banks are government-sized bureaucracies. The left hand doesn’t know what the right is doing. You aren’t dealing with a person, but a system. One side was pushing along a foreclosure while the other was working with us on the short sale.
* We had to stop making our payment in order to play this game. Although our payment really was killing us, you can’t do anything until you fall behind. The bank only works with those who quit paying. For us, this was no huge loss as we wanted out of the house and had a good situation to get into on the other side. It made eminent sense for us to do this, but it’s not for everybody.
* We maintained our homeowners policy on the property and continued to pay utilities throughout the six months. The house was well-maintained and I think that helped us, although I’m not sure.
It is good to be free as Mr. Gallagher said!