Should You Notify the Bank Your Home is For Sale?

Should you notify the bank your home is for sale when you’re selling as a short sale? Clients sometimes confuse my role as a Sacramento real estate agent with that of a lawyer. I have fiduciary with my clients and am their advocate 100%, no doubt about it, but I can’t give them legal advice — even if I know the answer. Because even if I know what seems like a reasonable answer, if it’s a legal answer, it might not be the best answer, and it certainly doesn’t take into consideration all of the finer nuances of law much less the client’s particular individual situation. On top of that, believe it or not, I don’t have a license to practice law.

So, I freely tell clients that if I so much as address what seems like a solution to their dilemma, they should get legal advice and not rely on any of those words that may or may not fall by accident from my lips.

The question I get asked a lot is whether a client should notify the bank that his or her home is for sale. First, think about all the things that can go wrong in the world of business and commerce. How often do you make a request that is carried out in the manner in which it was requested? Probably not very often. Second, consider the fact that if you’re behind in your payments, for example, the department that has mostly likely been assigned the task to get that payment is the collection department. The collection department might be located in a different building, perhaps a different city than the department that escrow or your Sacramento real estate agent would speak with.

These two departments rarely speak to each other or even communicate with each other. They post notes in a computerized file sometimes, but that would take a person capable of accessing the correct file on top of actually reading it to decipher. That’s probably not gonna happen, I mean, let’s get real.

The collection department, if a seller is delinquent, wants the seller to make a payment. The collection department is not likely to say, “Oh, why didn’t you tell me your home was for sale? We’ll just slink away and leave you in peace.” They are like a horse racing at Santa Anita. They just want to get to the finish line, and that’s the focus, to get a payment out of the seller. There is no other focus. There is no human element of caring and compassion.

Why do people want to think that banks are compassionate? Where do they get this idea?

If I stopped making my mortgage payments, I’d immediately change my phone number. I’d notify the bank it’s not allowed to call me at work. In fact, I’d change all of my communication preferences to mail. Snail mail. Through the U.S. Post Office. But I’m not a seller who is delinquent. I’m just a Sacramento real estate agent who will say what the hey; it can’t hurt to call the bank and let an employee know. For all the good it will do. Yet, there is that 1% chance it might make a difference, so, go ahead and call. At least once.