Does a short sale really help anyone?

I am currently working on my first short sale and it was a HEADACHE!  We have been trying to close this one for a week and hopefully it will happen tomorrow.  I hope the sellers are better off because it has been such a hassle they have stated they would rather go to foreclosure.  Heopfully all will be well.

Your right about the fact that no one really makes out on a short sale, especially the agent. We do  more work for this type of deal and yet we usually get paid less than for a straight forward deal.

Bobbi,

Short sales and their effectiveness is reliant on the bank.  Some I have found very amicable to work with, while others act as if they don't want to even talk to you.  Sometimes it is a matter of just finding the right person in the work out department to actually try to do their job.  Banks vary in how they handle foreclosure and it may be that this bank feels they would be better off foreclosing rather than working it out.  i know you said they wanted to have the seller sign a 100k promissory note, which depending on the price of the home could be a lot of money or a little.  Sounds like the bank wants the promissory note to use as a way to sue the sellers if they cannot pay and they will no longer have a home for collateral.  Before I would have them sign a promissory note, I would recommend they seek legal council.

I just had a 3 month short sale in escrow go belly up. My client was within $5k of the Banks final offer. We couldn't do it because lending approval was so tight. My contention is that the banks are not getting hurt and losing out as bad as we are led to believe. I don't feel sorry for the banks when they are short selling dollars created out of thin air to begin with.

Short sales are very difficult and can be impossible.  You have to show the lender you know what your doing and prove they will lose money by foreclosing.  Easier said than done.  In the case where a lender asks your client to sign a promissory note, I would counter that with a strong hell no.  If the bank pushes for it, they want the property more than the borrower - tell them to walk (consult an attorney first!).   DO NOT have them sign a promissory note and file BK, this is a double whammy....check the laws in your state to find out if this is a recourse or non-recourse loan....if you're in a non-recourse state and the lender is asking for a promissory note tell them to pound sand.  Again, consult an attorney :)

FYI, I have dealt with the lenders who are notorious for only having full voicemail...you have to call them at the beginning of the business day, some of them only have their VM boxes set up to hold one message - this keeps their phone from ringing off the hook >COUGH Option One COUGH<.  :)  So call them first thing in the morning :)