How Have Atlanta Short Sales Evolved Over the Past Year???
Quite honestly, they haven't....much. If anything, I've seen the Atlanta short sale market continue to digress. So, what is the reason?? For one, the HAFA program. In 2009, the Treasury Department introduced the HAFA program to provide a viable option for homeowners who are unable to keep their homes through the existing Home Affordable Modification Program (HAMP). The HAFA program took effect on April 5, 2010 and sunsets on December 31, 2012.
HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA. A list of servicers participating in HAMP (including HAFA) is available at: www.makinghomeaffordable.com/contact_servicer.html.
The problem is that most lenders aren't even aware of how this program works. So, they don't know what they need to do to execute it. And, if you're looking to short out a first and a second mortgage, most people aren't aware that the second mortgage doesn't allow the HAFA program. So the seller will sit and wait for a "dream" of getting money to move out of the home, while the buyer is the one who REALLY suffers. They wait and wait only to find out that the home could never qualify for the HAFA program and by then delinquency in mortgage payments catch up, the home ends up going.
The other reason that short sales are getting worse in their turn around time is that seller agents and sellers are pricing the homes too low for the reserves to be met at the bank. The banks are NEVER going to agree to the terms that are out there by the agents and sellers and its VERY MISLEADING to the buyer. Not all do it intentionally, they just don't know the process and NO ONE knows what the bank is going to do. So, what exactly is a short sale?
One of the most common questions I'm asked is "What is a Short Sale?"
When a property is labeled as a "short sale" this means that the buyer is in default on their mortgage payments and has asked the lender to work with them in accepting less money than is owed on the current mortgage. Although the seller is still technically in possession of the property, it is the lender who will determine whether or not the home will sell. The lender will require the owner to submit a "hardship" application proving that the seller does not have the financial capacity to pay for the home or make up the difference in what the home might sell for versus what is owed. Once approved, the lender orders a BPO (broker price opinion) or an appraisal to determine what price would be fair for them to accept knowing they are going to take a loss.
The most typical issues you will encounter are primarily time for acceptance, lack of firm pricing decisions, additional liens and multiple mortgages. Quite often, lenders can take 60 days or more to respond to an offer due to the approval process they must go through once an offer is received, especially with certain banks who will remain nameless. If you would like a detail on each bank and my experience with them, I would be happy to share at another time. I've seen short sales in Atlanta take up to 6 months before there is even a response. This lengthy and exhausting approval process can very frequently result in even "full price" offers being rejected. Sellers and lenders are under no legal obligation to accept even a full price offer. They can change their mind at any time and they often do.
I've seen many homes listed at "incredible" prices and labeled short sales, only to find out that the price was never even in reason of being accepted by the bank. The seller/agent may have been trying to just create interest and get an offer to see if the lender would act on it. In the end, this creates frustration for everyone from the lender to the buyer, and the purchaser.
If you DO decide that a short sale is an option that you would like to pursue, be sure to get a qualified realtor who understands the process, the best way to present your offer, and the skills to know how to follow up with the bank and other agent....I've dealt with many short sales in my career and would be happy to pass along my findings. Katerina Gasset also specializes in short sales in her area of Florida on the listing side.
There are still several Atlanta short sales on the market right now. But, what's even better are overall there are STILL just a ton of GREAT ATLANTA HOME DEALS right now whether they are short sales, foreclosures or just MOTIVATED SELLERS. I know the economy seems scarce, but Atlanta never saw the over-inflation of home prices the way other areas did and therefore is already starting to stabilize. Home prices have been slightly increasing over the months. Expect this trend to continue. No one's going to ring a bell at the bottom!!
So, get in on one of the biggest discount sales events this country has ever seen and let me help!!!