This is just a quick note for anyone that is considering a short sale:
Recently in my business, I have noticed a dramatic shift in the attitudes and effectiveness of banks/mortgage lenders when presented with an offer for a short sale on a home. 18 month ago, when i really started doing these, it was nearly impossible to get anyone at the banks to even talk to me. Then, when I was able to speak to someone, they frequently did not know and did not care what it was that i was proposing. I would talk to their supervisors and be begrudgingly talked at, which primarily amounted to a list of demands that were to be met, with absolutely no regard for ethics, etiquette or even common business sense.
I’m happy to report that times have changed.
Now, not only do the major home lenders have entire departments set up just for handling short sales, but they actually seem happy to talk us and show a sense of understanding when faced with the choice between accepting a short sale and risking the extra time money and exposure on taking the home through the foreclosure process and putting it back on the market for sale.
Here’s a few examples:
1. A short sale with two loans, one with Chase and the other with GMAC was approved in a friendly, ethical manner in two weeks from the time that the offer was received.The loss that was taken by the Chase was around $75,000 and GMAC ate about $50,000.
Sellers: Lost everything that they had put into the house(about $52,000) but were able to walk away without any further obligation, responsibility or financial liability AND were given $3,000 as an incentive for completing the short sale and not just walking away from the home.
Buyers: Total transaction time was about 7 weeks. Got into the home of their dreams with the lowest priced home in the neighborhood!
2. Another Chase short sale, this one with an investor owner and two loans. (which are usually the toughest short sales to get approved.) After one buyer who bailed out after waiting for 1 month for approval we got a another offer. This one was approved after two weeks and there were also incentives offered to the Seller for completing the short sale. Chase apparently is randomly selecting particular short sale borrowers to receive seller incentives for leaving the home in good condition and maintaining the utilities, etc until closing. This approval was absolutely hassle free and actually required quite a bit less paperwork and documentation than most. Way to go Chase!
Seller: Got out without any further liability. Received $20,000.
Buyer: Once again got the home of their dreams and paid less than anyone else in the neighborhood.
3. A number of large lenders have gotten on board with equator which, love it or hate it, is a very organized and efficient software for processing the short sales and all of the documents that go with it. This is just another sign that lenders are wanting to streamline their systems to make the short sale process work.
Seller: More likely to have a successful sale, less time spent dumping $ into a bottomless pit.
Buyer: Less time spent wondering if the purchase will actually happen, less stress, better deals.
The point of all of these examples is just to let you know that many of the horror stories that you may have heard in the past (yes, some of them were probably from me) are likely to be just that: stories from the past. Lenders are starting to make some sense in their attitudes about short sales and will at least consider a short sale as an alternative.
What this means for you if you are considering buying a short sale is less uncertainty, time and hassel as you are trying to purchase what is likely to be a very good deal.
What this means for you if you need to sell and owe more than the home is worth is that there are options and talking to a realtor and/or your lender is a great way to explore whether a short sale is the best option for you. You are not alone and the process is much less dysfunctional than it was 18 months ago. Lenders do not want to take your home, they just want to minimize their loss. A short sale may be the best way to do that and free you from having a burden you cannot bear for years into the future.