WHY SHORT SALES AREN"T SHORT

Diane Oakes (Coldwell Banker) — Mon, 11 May 2009 14:39:19 -0700

WHY DOES A SHORT SALE TAKE SO LONG TO CLOSE?

You would think the banks would want their money as soon as possible, but that just doesn't seem to happen. There are so many factors and sides involved in a short sale, especially if the bank is the third party and third party approval is required. There can also be a second mortgage or even a third mortgage held by another lender or lenders although they have to get in line behind the first. Of course, price is important, especially if the bank has a certain amount it needs to get. Unfortunately, due to the number of foreclosures, most banks do not have enough employees to handle these sales nor do they have any certain procedure set up to handle these contracts. Plus, a lot of these lenders continue to accept offers, hoping to get a better deal. It can sometimes take over 6 months to close on a short sale house.

Many buyers I have talked to don't really understand what a "short sale" is. They think it means the sale will be quick(short in time). That is hardly the case. Short sale basically means that the lender is willing to accept less than the loan amount. In other words, the lender will be short some of the money owed on the loan.

The buyer, if in back-up position, can continue looking for another home, however. The prices on the short sale homes are good, but if you are in a hurry, you would be better off looking at homes that are not short sales. There are still a lot of good buys available, and you can usually get an answer by the next day as to acceptance, and you can also close in a lot less time--usually a month. I work with buyers and sellers in St. Petersburg, Florida and I find it to be challenge (in the present market) for both parties

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WHY SHORT SALES AREN"T SHORT