Short Sale update for Summer 2009 ...
We've had a number of short sales close over the past 60 days. Many of these we worked on from anywhere from 4-8 months before finally getting all approvals.
Banks, right now, want to complete the short sales .... in fact, a couple of the major banks, notably Wells / Wachovia, B of A, and others have hired additional people and set up special loss mitigation departments in order to expedite these short sales.
Banks are finally getting the message .... that is, it is in their best interests to approve the short sale rather than foreclose on the property. Their bottom line is better ..... foreclosing on the property, putting it into their REO inventory and then reselling the property, down the line, eventually costs the bank much more money ..... most banks finally understand that.
What we are finding out is this:
1. The timeframe to complete a short sale, from A-Z, is still very lengthy .... anywhere from 4-6 months.
2. Most banks handle these situations more efficiently than they did in 2008. However, delays still arise mostly because these banks are dealing with thousands of new short sale requests on a daily basis.
3. Banks still try and milk every single penny that they can out of the deal .... by cutting $$$ anywhere they can. (Our commissions being the first thing on the chopping block.)
4. Many banks now try and execute deficiency judgements against the former owner .... if not that, they will try and get the owner to sign a promissory note for the short fall. Lawyers are now very busy dealing with these two issues .... with many lawyers not able to take on new short sale clients because they are too busy with existing ones. Depending on the loan type, bank, location of house, state, etc., banks may have some legal recourse against the previous owner for the short fall. (Another area where realtors need to develop some knowledge / expertise.)
For Buyers, purchasing a short sale continues to be an excellent avenue to purchase a home at a great price, and in some cases, avoid all of the competitive buyers out there presently bidding on REO's. The downfall, for buyers, continues to be the long waiting period .... many times without getting any kind of update with what is actually going on.
Looks like the good deals, for buyers who want to purchase short sale properties here in Alameda County California, are going to continue into the foreseeable future.
Thanks for reading!!
Tom
realestate@tomlyons.com
925-215-1105
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