More on Short Sales

Dave Liniger, Co-Founder and CEO of RE/MAX International says....

 

I was delighted to hear about the Treasury Department's new guidelines regarding Short Sales. RE/MAX has been working hard to spread the word about the benefits of Short Sales. I don't think it is a coincidence that two days before the Treasury announcement we briefed FHFA personnel in Washington who were working with Secretary Geithner on this issue.

Finally, there may be some movement on a process that could best be described as "challenging." Many real estate agents refuse to work on Short Sales because they take too long and buyers just don’t wait around for the lender to respond to their offer.

However, if a homeowner has been turned down for a loan modification, they can still avoid foreclosure by working with a trained agent on a Short Sale. It’s a great alternative to going through foreclosure. The homeowner avoids the severe hit on their credit, the neighborhood has one less vacant home, nearby homes don't lose as much value, and the lender can save around 30% over selling a foreclosure.

Despite these positives, we all know the process hasn't been working, but now the Treasury Department has taken a step in the right direction. Their guidelines seek to streamline the process with standardized forms, cash incentives to lenders, moving allowance for the homeowner, and requirements on response times. The feds are working out the details and these policies should be in place soon.

As a result, I think that very soon the volume of Short Sales will increase dramatically. NAR still tells us that distressed properties are making up nearly 50% of all existing home sales. So, my message remains the same - Prepare yourself to handle Short Sales and REO Sales for the foreseeable future.