Short Sales: Really? Today? After all this gain in equity?

By
Real Estate Broker/Owner with Maui Life Homes / Metro Life Homes RS-78439 / BRE #01708344

Short Sales:  Really?  Today?  After all this gain in equity?

I have not only facilitated my own short sales, but since 2007 I have been a certified, hired short sale facilitator and have successfully facilitated and closed many short sale transactions.  I have seen quite the spectrum of scenarios and have dealt with dozens and dozens of banks and junior lienholders.

Yes, believe it or not, short sales still exist in our current market.  Not many, but there are a few out there.

You may be asking "How is that possible after almost 6 years of equity gains in the market?"

Well, there are a few reasons that may come into play.  The most likely one is that equity lines of credit have still been available to homeowners during this time period.  Although guidelines have been stricter and Home Equity Lines Of Credit (HELOCs) have not been as abundant as they used to be, they have still been available to those that qualify.  Thus, having both a mortgage and a HELOC on your property during the time when you find it necessary to sell could create an upside down scenario.

Another reason could be that certain areas of the countries have not had quite the recovery as our major metropolitan areas, and the slow climb back up again may still be JUST a tad short between market value and what is owed on the property.

 

And lastly, there could be socioeconomic factors that are unique to a certain neighborhood that have caused a decline in property values during our last 6 years - perhaps a huge job loss in that city caused by a large corporation pulling out of that area, natural disaster that have caused a negative factor in the desire for people to want housing there, etc.

 

The good news?  Those lending institutions that process the short sales have departments that are now at a comfortable capacity to process the short sale files MUCH faster.  During those years where short sales reached their peak, which was approximately 2008-2013, the banks were so swamped with short sales that there was not only huge delays in processing the files, but I can remember there was at some times much discourse in their interdepartmental mechanisms to the point where the left hand didn't know what the right was doing, and some files just sat there.  I remember quite a few times where that bank's negotiator either moved interdepartmentally, went on vacation, or just left the bank altogether and my short sale file ended up sitting there collecting dust until I had to threaten to hop on a plane and show up at their office with a whole lotta "give 'em what-fer!!

But honestly, if you are presented with a short sale scenario, just STAY CALM and process that file.  As I stated, you'll find that since the banks can process the files much more quickly now with appraisals being ordered faster and the underwriting process coming a little sooner, you should be able to process that puppy a lot sooner.

I have not only facilitated my own short sales, but since 2007 I have been a certified, hired short sale facilitator and have successfully facilitated and closed many short sale transactions.  I have seen quite the spectrum of scenarios and have dealt with dozens and dozens of banks and junior lienholders.

 



Ralph Gorgoglione - Owner / Realtor
Top 3% Realtors Nationwide
Metro Life Homes  / BRE #01708344
Maui Life Homes / RS-78439
(310) 497-9407 / (800) 591-6121  /  Fax:  (866) 470-2717
Web:  metrolifehomes.net  /  Blog:  HomeChitChat.com 
 
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Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

We are one of those areas where the equity has not appreciated as rapidly as  others, so short sales are still almost 25% of the listings.  As we are a Judicial state, I do believe that banks would tend to allow short sales over foreclosures due to the high cost of taking the owners to court

Feb 20, 2017 10:30 AM #1
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Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

Ed, you have a good point.  Up until I started doing transactions in Hawaii, all of my California files were processed under a non-judical state setting.

Feb 20, 2017 10:33 AM #2
Rainmaker
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Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

It is surprising that there are still short sales around, and let's hope that something major doesn't happen to cause another surge.

Feb 20, 2017 12:29 PM #3
Rainmaker
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Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Ralph, it is a bit scary...but they do still exist! You have to wonder why the banks just don't take them back and turn them around.

Feb 21, 2017 12:44 PM #4
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