Can You Stay In Your Home During A Short Sale?Posted by Tim Ryan on Tuesday, February 1st, 2011 at 3:57pm.
When doing a short sale on a property, many sellers ask if it's okay if they stay in the home during the process. The answer is yes, you can stay in your home during the process as lenders do not require you move out. In fact, lenders prefer you stay in the property during the process but the decision to stay or move out of your home is up to you.
What if you can't make your payments though? This brings up a moral dilemma as some sellers think they shouldn't stay if they can't pay. So another question is, should you stay? That questions can only be answered by you, but my professional opinion is yes you should and here's why:
If you are able to stay in your home during the short sale but can't afford the mortgage, use that time to save some money. After your short sale is completed, you're going to have to live somewhere. If you don't have friends and family to stay with, you can use the saved money on moving expenses and a deposit on your first month's rent for a new residence.
Also, keep in mind that during a short sale it's very important to find a willing and able buyer to purchase your property. If you leave your home during the process there's a good chance your home could be vandalized or damaged in your absence. If your home becomes damaged after the buyer negotiates a contract they may walk away causing you to face foreclosure.
A lender knows that if you're in the home during the process, you probably won't let maintenance issues go unattended. Any number of problems could happen if the house is vacant, and by staying in the home, you're helping the lender lose less by maintaining the property.
Many sellers don't realize that a short sale is basically the same process as a normal house sale. The only difference is the sale is subject to the banks approval of an offer. But, in order to get that offer, your home has to be priced well and in good condition.
You should do your best to make the home look presentable during showings just like a normal sale. The better offer you can get on your home the better chance you have at a successful short sale. A lender, in order to approve the short sale, wants to get as much money as possible. If you keep the home in tip top shape, you have a better chance of receiving a suitable offer.
It's also important to note how long short sales take. It can take anywhere form 3 months up to a year or longer for a short sale to be finalized. That's a long time and you never know what could happen. If you lost your job, you may be able to get a new one and save your home. You may also win the lottery and get a chance to pay it off, who knows.
If you're short selling your home I would recommend you stay in the home if you can. If you can't, no one is going to force you to stay. If you do move, I would recommend you have someone check in on your home regularly to ensure there are no problems. Good luck!