short sale process
So much of the daily news is inundated with our new President Barack Obama flexing his muscles regarding the leaders in the banking industry, their salaries, bonuses, etc.
I wonder if any of these White House officials, senators, congressman, etc. have ever tried to purchase a home via a short sale. These homes ARE the bad debt our tax dollars are going to “bail out”. Why is it that no one is paying attention to this process? If this process were regulated and streamlined, the banks would incur less debt as homes would close faster and for more money.
Being a Florida real estate broker this is something I and my associates experience each and every day. Here is a portion of the typical short sale experience:
1) The seller owes more than the home can sell for;
2) Listing agent puts home on the market for fair market value;
3) Listing agent receives a good offer, has it signed & accepted by the seller and submits it to the bank, along with price comparisons of similar properties in the neighborhood to justify the sale.
4) Buyer waits for the bank’s response. THIS IS WHERE THE BANK SHOULD HAVE TO RESPOND WITHIN AT LEAST 30 DAYS! But they do not respond and no one requires them to do so.
Many of these short sales go 3, 6, 9 even 12 months without a response from the bank. All the while the market values are going lower and lower. The banks take so long to respond, by time they do respond the buyer refuses to pay what they initially offered as the home is no longer worth the originally offered price and can no longer appraise.
As an example, a client of mine offered $180,000 for a home in Fort Lauderdale. It has been almost one year and we are not any closer to having a response from the bank than we were a few months ago. The offer is an extremely strong offer, however, my client is getting ready to walk. What happens to these homes after a year and the buyer walks?
Here is the real clincher. The home gets foreclosed on at a cost of approximately $50,000 to the bank and gets put back on the market only to sell for $160,000 – $170,000 instead of the original $180,000 offered. You can see how an estimated additional debt of $70,000 has been CREATED by the bank all because they do not respond to these short sale offers in a reasonable time period. And this is only ONE home out of tens of thousands. We, the taxpayers, are paying for this additional debt when the debt could have been limited to the difference between what the original seller owed and fair market value.
I sincerely wish that Obama or someone from his team would look at this issue and place regulations as it could save hundreds of millions of dollars countrywide. If the short sales would close faster, our housing market would rebound faster as when there is less inventory, prices begin to rise.
The short sale process. One would wonder how it ever got its name.
About the Author:
Lisa M. Brodeur
Alliance Realty
www.AllianceRealtyFlorida.com
Article Source: ArticlesBase.com – Short Sale Process – Anything But .
The Short Sale Process By The Short Sale Realty Group