SHORT SALE BANK PROBLEMS CONTINUE
Short Sales take too long for many reasons, and the California Association of Realtors drafted an open letter and published in newspapers nationwide.
Thom Colby, a California Realtor, wrote:
The open letter discusses
- the benefits of doing a short sale rather than a foreclosure;
- the inconsistencies with short sale processes at banks;
- the challenges of working with multiple lien holders;
- and the slow and/or nonexistent communication by banks and servicers to REALTORS®, homeowners, and buyers.
The letter calls on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve the short sale issue and other issues that get in the way of an economic and housing recover
C.A.R. open letter on short sales
Short Sales have another problem in that there is no one training solution for agents; and many agents don't take any training at all. They start out cold, making many mistakes in the process.
The national short sale average closing ratio for agents is around 25%. Agents who have had extensive training and experience have a closing ratio of around 80-90%.
When I'm working with buyers on a short sale I check the closing ratio of the listing agent and ask them questions about the specific property to determine if this short sale has the potential to be completed. That's important because there are some listing agents who are demanding 90 day non-refundable earnest money deposits from buyers. Before I would advise my buyers to accept that, I need to know the odds they're facing.
There are several short sale training courses for agents. Some are for designations and some aren't. The designations show that the agent has had some formal training.
The problem is that each training focuses on a different aspect of short sales; none cover everything, so agents need to take every course available to learn as much as possible before embarking on listing short sales.
Although I primarily represent buyers, I'm gravitating toward doing more short sale listings because I enjoy helping people. I've been succcessful in the listings I've taken because I've had a lot of training, but there is still something new to learn every day. I also use a web based short sale transaction manager software that allows my clients to get up to date information on the web. I can give my seller and the buyers agent access to the software 24/7 so they can view all of the activities on their account without having to take their time to telephone or email me. Every phone call and every email to the lenders is noted there.
If the lenders, investors, and mortgage insurance companies would standardize their systems and methods; and if there were one training program for agents that would be all inclusive, then this huge problem could be reduced so a short sale could be completed in 30 days. That's the goal of the CAR in their open letter.
The HAFA program (Home Affordable Foreclosure Alternative) which is under the MHA program (Making Home Affordable) created by the US Treasury Department actually helps; provided the seller is qualified for the program.
HAMP (Home Affordable Modification Program) which is also under MHA has not been successful.
Recently my buyer offered on a home that I thought may qualify for HAFA. The listing agent didn't know the HAFA guidelines but was willing to let me explain them to her. It requires a response from the lender within 30 days. Within 34 days of writing the offer we had a reasonable counter from the first lender, and the second lender had agreed to the payoff the the first offered; we countered the counter and the lender accepted. Within 35 days we had an agreement.
More structured programs like that, and training, are needed badly in order to work through these short sale issues to help the homeowners, and home buyers.
If you need to do a short sale on your Gilbert AZ home, or in the Mesa, Chandler, Queen Creek, Tempe or city of Scottsdale, contact Captain Bill; he can help you.
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