The Short Sale Blues: Dealing With Each Unique Phase During a Short Sale

It is easy to feel discouraged when you deal with short sales. I’ve been there before myself. There are a few phases that come along with the “short sale blues”.

Phase 1: Carrying On: The first phase of short sale is when you start having financial difficulty. This usually is not one huge financial crisis, but a series of them. You keep telling yourself “I can still get by. It will be rough, but I can do it.” If you get out of this phase consider yourself lucky since many people are unable to.

Phase 2: High Stress: The stress and depression of not being able to make payments for your home and other bills starts to really cause stress and sadness in your life. Where you might not have ever made late payments before and had perfect credit, things are quickly flipping around. This is the phase where you feel like you have hit rock bottom.

Phase 3. Resigned Resolve. If all goes well, you’ll spend as little time as possible in phase 2 and move quickly to “resigned resolve.” After talking to friends and perhaps speaking with a lawyer, you decide to put the home up for sale. Many borrowers quit making house payments at this point and for those who do, there are a few months of respite from the horrific financial pressure you’ve been feeling. You live with the hassle of people tromping through your home and slowly come to grips with the thought of leaving your home.

Phase 4: The Waiting Period – Short sales make up around 20% of the Boise real estate sales. Home sales are up by 37% in Boise from the February to March. There are buyers out there who want your home, and you might not have a hard time finding someone interested in your home. The problem lies with often being forced to wait on the bank for them to approve the short sale. Approval from banks can be a long and tiring experience for homeowners. Many times you go through two or three interested buyers before the bank finally approves the sale. This can be disheartening when you are in a dire situation and don’t have a lot of room for a sale to take a long amount of time.

Phase 5: Close the Deal – Finally, the day has arrived where your short sale finally closes. This is not necessarily a happy occasion, but it is one that offers relief from the constant headache selling your home offers. This is a good time to let go of the hardships and move on with life. Be sure to speak with your accountant about whether or not you will receive a 1099 tax form because of the income you got from your home sale.

Short sales often bring depression with them. However, don’t let those feelings get you down for long. There is light at the end of that very long, dark tunnel. You can overcome a short sale of your home and live through it.

Todd McCauley is an owner/agent of Eagle Rock Properties, a Boise real estate company. He helps struggling buyers and sellers with their Boise homes.