The word Short Sales raises an instant fearful reaction. Many agents still do not know how to handle them and the thought of getting a paycheck in maybe 4 months or never at all can deter many away. But this would be a blunder because short sales are here to stay and are not going away for a while. Get with the program.

The market depreciated beyond it actually should have and even though we are in a correcting market now, it will take a while for values to come back up. There are still many homeowners who are under water and will continue to remain there. Many homeowners feel that the market will come back soon, hoping that the glorious golden days of 2005-2006 will return with a vengeance.. you have another thing coming your way. Short sales are getting a little easier now.

Banks are learning very quickly that this would have to be the way to go or else they would have a lot more bad assets on their books. Taking a loss now than later, adding on the costs of foreclosures will definitely tip the scales. I must say that the worst of them all- Bank of America- is actually getting better with their new platform on Equator. The BPO gets ordered quickly. I have noticed that owner occupied homes are getting a faster response as opposed to non owner occupied. Wells Fargo is still the slower one of the lenders. I have one short sale going on right now, where they have taken nearly 2 months to order the BPO, after repeatedly blowing me off by saying that they have not received the authorization !

Here is my take on something else that is changing the dynamics. Just because Short sales are something agents want to keep away from, the regular sales that come on the market are inundated with multiple offers. What that does is push the prices up. Now if a short sale comes on with similar square footage, the comps getting pushed up higher and the banks now start demanding for the higher price stating that this is the current market value of the property.

So what is the advantage of a short sale, some may ask? For a seller it may be the right time to do it, especially now with the new government mandates. If it is your principal residence, then you may qualify under the Mortgage Debt Relief Act and with California now conforming, the seller can walk away from a burden they cannot afford. But if you refinanced the home, you lost the right to protected against a deficiency. The Realtor action committee is trying to get a legislation passed to protect sellers from this clause, as alot of people did not know that they would lose their rights if they refinanced their home.

For buyers, Short sales, in this current market do not propose any better opportunities. If you are paying current market value, forget trying to low ball offers and get them through. The banks are doing multiple BPO’s to determine the correct value of their assets. Why the buyers should continue to buy short sales? Because there is more short sale inventory in the market as opposed to REO’s or regular equity sales, so they cannot run from it & these homes are still 30-40% cheaper than what they were in the hey days.

Will things get better? Yes I think the streamlining of short sales is evolving. It is not hunky dory but it is not as bad as it used to be when neither the agents nor the banks knew what they were doing. Is it still challenging? Yes it is. But what is not? If you have been thinking of short selling your home, now maybe the right time to do it.

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