I attended a 7 1/2 hour class today on short sales and foreclosures. I learned a few things, but in general I have picked up a lot of information by just being in the market place.
The percentage of our market that is short sales, foreclosures, REO (bank owned properties) for sale is at this date (3/2010) right about 15%. Last year at this time it was 12% so we are seeing a slight increase of short sales in Spokane Wa.
It is somewhat overwhelming realizing the scope of this issue. It didn't happen overnight, and we are probably not through the worst of it.
One thing I know is that each situation is different, and while banks seem to treat these people as files and loan numbers, we need to be compassionate, patient and give people the dignity they deserve.
Many have fallen on hard times. Some people over indulged and bought toys or just plain spent money from second mortgages, or HELOC'S (home equity line of credit).
Using a house as a cash machine is bound to rebound. But I think many folks are truly victims of the declining market. That coupled with the difficult economy has created waves of loan modifications, pre-foreclosures, short sales, and unfortunately foreclosures.
Although I am around real estate professional all day long, I still don't personally understand why there can't be a more efficient system put into place in the banks to deal with the onslaught of these sales. Even after a few years of the obvious fact that they are not going away, banks seem to be under staffed and ill prepared to deal with the demand. It takes several weeks, in many cases months to get an answer back from a bank on a short sale.
It would make sense that the banks would give some kind of incentive for closed files and move more of these through the system.
That said, after the class I have more questions than answers to be honest. I wish there was some central way to work on solutions that could make a difference to the person on the other end of the loan number. The distressed home owner who is in limbo, and under the financial strain of it all.
Preparing buyers for the reality of what it means to be on the other end of a short sale is KEY.
A short sale is considerably more work for a Realtor, whether representing a buyer or seller. We are often expected to do this for a reduced commission. This really makes little sense when you consider the daunting task of trying to swim upstream through the lenders red tape. However, on the other hand- if we can help our clients and they are pleased with the end result, it is worth it.
The grand issue of short sales and foreclosures is complicated. It takes a considerable amount of time, patience, and tenacity.
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