Is short sales helping the housing market?

By
Managing Real Estate Broker with Western Singh Business Brokers

We have seen lot of homes went from foreclosure stage to short sale since end of 2009. Their has been surge of short sale properties in market, where 65% of all properties are for short sale specifically in Central Valley, CA. Are these propeties are making better the market or worse?

 

If we can see from sellers's side then the short sales have helped sellers to save them from big hands of banks where in past couple of years sellers were crushed by banks by foreclosures mostly. Now the sellers got something to imporve their credit or life on sooner. Also the incentives with HAFA program has also helped to moving costs, so seller don't have to take all burden in this hard times.

But on other side through short sales, buyers and their agents are somewhat frustrated by the slow moving process of short sale where it takes 6 to 8 months for a normal short sale deal to close. In addition, there are many lender side suprise in the middle of the deal which always make this process uncertain mostly. Therefore, buyer representatives are always in fear of losing their clients becasue of this dealys.

Also on sellers side, it gets diffcult to get approved first with tons of paperwork and 3-4 months of time for approval. As sellers are already passing through diffcult times and now they have to face with this paperwork and more delay. Most of the times, the buyer back out problems are disastorous in any short sale where you have spent 2-3 months of your time approving the buyer offer. Now recently we have seen some progress by Bank of America  to decrease that time in reapply for new buyer's offer after previous buyer backed out. But still there are most of the possibilities/loans which can;t be covered with that. This program on works if you have an active back up offer and buyer is willing to take action rigth now.

Overall, the short sales are good for the housing market specifically for Central Valley, CA so we have at least stopped the bank owned properties signs in our market. But their should be much more to do in terms of having some certainity and stability in the short sale approval process by lenders.

Please let me know your comments!

 

 

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