You know that short sales have become a national problem when the Senate steps in. For the uninitiated, a short sale is 
a way to avoid foreclosure. The homeowner sells the house for less than the unpaid balance of his mortgage, with the lender's approval.
Short sales, in theory, are a win-win. The homeowner avoids foreclosure, the lender receives more for the property than they would if they foreclosed, and the buyer gets a great deal. Not to mention that short sales don't drag down the value of neighboring homes to the extent that foreclosures do.
But in reality, short sales are such a headache that many buyers avoid them like the plague. The majority of real estate agents polled said that short sales take from 4 to 9 months to close. Many buyers don't have the luxury of that much time. We personally have walked away from more than one short sale in our own house searches--we just didn't have the patience.
And the reason for the lengthy waiting periods? Unresponsive banks. Thus the action by the Senate.
The proposed bi-partisan legislation would give banks a 75-day deadline to respond to written offers from buyers. There is even a penalty of $1000--to be paid to the buyers--should the bank fail to comply with the language of the bill.
Moe Veissi, president of the National Association of Realtors, weighed in that due to the current time-consuming and inefficient process, many homebuyers walk away from deals that could have saved homeowners from foreclosure. "As the leading advocates for homeownership, realtors are supportive of any effort to improve the process for approving short sales."
This legislation is, to us, a welcome sign that some folks in Washington are taking common-sense measures to help the economy. Heck, we may even contact our senator and encourage him to support this bill. Speeding up the short sale process can only help the housing market recover--and that's something we can all get behind.
If you need some help selling your home, give Marty a call at 720-891-9000. He'd love to help.
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