I'm sure many people have spoken to this topic, I'll try to add a different perspective.
When talking with clients, education on short sales seems to be a re-occurring conversation. So many incoming calls always ask me "what is a short sale?"
More times than not, I've come to the opinion that these types of transactions need to be coined "long sales". While not every instance of a short sale passes the 30,60,90 or even 120 day threshold for 3rd party approval that I've heard of, more times than not, my buyers have no idea that a short sale ultimately requires 3rd party approval by a Sellers lender to being with! On top of that, they have no clue that it could potentially take longer to proceed with a short sale deal than a regular deal.
Even though I understand the demanding logistics of a financial institution wanting to minimize its potential loss, I think there needs to be a way to stream line the process before short sales can be allowed into the listing services to compete with sales not requiring 3rd party approval.
With IDX feeds sharing listings across the net, customers have a tough time differentiating between what's a normal sale vs. a short sale. For some clients, the listings they choose to pursue can be critical when they have an expiring lease within 30-45 days and have to close to get into a home immediately.
While I'm empathetic with Sellers who need to short-sell their homes, I wish there was more commonality and restrictions in the way short sales get handled. If a listing is going into the system as a short sale from day 1, it would be nice if there was a requirement of Sellers to have their banks provide a letter that they have an approved BPO or appraisal prior to letting a listing be entered into the network as a short sale. It seems that a system like this could alleviate a lot of the delays by requiring Sellers and Banks to communicate prior to complicating a Buyer into the equation.
Not only that, why couldn't the BPO's or appraisals be used as a tool in generating the initial listing price in short sales in order to circumvent some of those short sale listings that pop up 20% less than regular comparable market listings? Those listings not only strip normal sellers of deserved traffic, but seem to give Buyers the impression that values are sliding that much more. Consequentially, normal sellers feel like they should reduce their prices again to compete with those lowest priced "unapproved" sales prices. I think this causes a tumbling effect in our real estate markets.
With appraised values having to work both ways for both the Buyer securing the financing and the Seller trying to short-sell, it would seem that sharing the appraisal or BPO on the front end would be a mutually beneficial thing to do in the instance of short sales.
Just some food for thought...
Shane Murray, Realtor, C.P.M.S.
http://www.eastvolusiarealestate.com
Your source for New Smyrna Beach, Florida Real Estate
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