Short Sales Are the New Waiting Game
Posted: October 15, 2009
For those of you that have not had the misfortune to deal with a short sale in the Real Estate market (from either a buyer's or seller's side), they are situations in which sellers can unload their properties at a drastically reduced price (instead of foreclosing). Buyers are able to purchase a home for a lot less money, banks still reap some of the financial benefits of their investment (though little), and sellers take a lesser hit on their credit score than they would if going through a foreclosure. Sounds great, right? In theory, yes - but what some home owners (and buyers) don't realize is that short sales require patience and a lot of time.
The plight that many sellers and buyers find themselves in is directly related to banks and the teams they have in place to service short sales and offers. Typically, once a home owner submits a barrage of paperwork to their mortgage servicer to be approved for a short sale (including tax & bank statements, hardship letters, etc.), a bank assigns an appointed service person to handle the case, and coordinate an appraisal to determine the bank's value of the property. Once this is done, banks are in a better position to determine what they will accept as a selling price. This whole process is not rocket science, but on average, servicers can take up to almost ten weeks to respond accordingly to a short sale offer on a property. At that rate, it's no wonder homeowners (and buyers) are becoming increasingly frustrated.
Banks and lenders are working to amp up their response time, and lessen the overflow of short sale problems, but relief will not come overnight. In a recent study done by Campbell Communications (courtesy of FAR), two out of three short sale offers die in the process, due to the extraordinary length of time that buyers have to wait to find out the fate of their offer.
The motto of this story? If you want to join the short sale party, be ready to play the waiting game.
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