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Answers (14)
- ConnieK_Oklahoma
- Contributions:2899
I tend to agree, however, from a seller's perspective it's better to get out with a short sale than have a foreclosure. Title work is cleaner that way too. I have found short sales to be a pain in the past but since they are becoming more common the banks are getting better at communicating etc. It's not a good thing that they are more common but now that everyone's not "new" at the process it's less frustrating. I try to remind myself how much of a pain it would be for the buyer without me and that helps.
- Georgina OBryan, "GOBryan1"
- Contributions:483
There are some legit short sales out there.. I've closed a few but there's also many that are just for the sake of stalling. Sellers don't generally tell the Listing agent that but working with mods, I've seen it all too many times. A house is on the market, Seller's situation improves, takes house off the market and begins mod process to save the property. Don't be fooled, this is very common. Some Sellers will be upfront with the agent about their intent but many aren't. Whether it's vacant or not is irrelevant in this type of scenario because they will vacate and then take possession of the home during the mod process. Attorney firms will tell them to do so.
The homes that have a better opportunity of being legit short sales are those that have an extensive deficit or those belonging to a couple in the middle of a divorce. If the loan is FHA and over 1 year behind, those won't likely obtain a good mod as they don't qualify for HAMP so those homes will likely be true listings also. FHAs in general are not getting good mods. Most of the time, they end up with the same payment or higher. The only true advantage is for those behind who want to be placed back on track with their mortgage in order to save the home.
The homes that have a better opportunity of being legit short sales are those that have an extensive deficit or those belonging to a couple in the middle of a divorce. If the loan is FHA and over 1 year behind, those won't likely obtain a good mod as they don't qualify for HAMP so those homes will likely be true listings also. FHAs in general are not getting good mods. Most of the time, they end up with the same payment or higher. The only true advantage is for those behind who want to be placed back on track with their mortgage in order to save the home.
- Linda S Reynolds
- Contributions:163
I have closed several short sales. The only thing I don't like about them is the time they take to close.
- Pasadenan
- Contributions:21466
"to begin with, are they really for sale?" -
An agent wouldn't waste their money listing it if they didn't believe they could get it sold... Of course, the agent could just be trying to get phone calls to sell something else, but that is NAR's oath of ethics for you.
The issue has nothing to do with the seller's intent; it is whether the seller's letter of hardship has been accepted by the financial institution, and whether the lender is willing to take the loss. If you have a good listing agent experienced with short sales, the sale will go through, though still taking more time than a conventional sale. If you don't have a good listing agent or have one that has no short sale experience, of course it will not get sold and will likely go into foreclosure.
That is why you don't just hire someone with SFR credentials, as that NAR course means nothing by itself.
Anyway, if a buyer wants to make an offer on a Short sale, and you say "no", the buyer will just find someone with more experience that is willing to write the offer and do the follow up for them.
An agent wouldn't waste their money listing it if they didn't believe they could get it sold... Of course, the agent could just be trying to get phone calls to sell something else, but that is NAR's oath of ethics for you.
The issue has nothing to do with the seller's intent; it is whether the seller's letter of hardship has been accepted by the financial institution, and whether the lender is willing to take the loss. If you have a good listing agent experienced with short sales, the sale will go through, though still taking more time than a conventional sale. If you don't have a good listing agent or have one that has no short sale experience, of course it will not get sold and will likely go into foreclosure.
That is why you don't just hire someone with SFR credentials, as that NAR course means nothing by itself.
Anyway, if a buyer wants to make an offer on a Short sale, and you say "no", the buyer will just find someone with more experience that is willing to write the offer and do the follow up for them.
- Georgina OBryan, "GOBryan1"
- Contributions:483
To begin with, are they really for sale? On many occasions, Seller is just stalling for time until they find a job to be able to do a loan modification and save the home from foreclosure, so they can be a waste of time to show.. I see this happen quite often.
I much rather show REOs.. They are not always damaged either, just a good portion of the time. Sold one that even had stainless steele appliances, 2000 sq ft, in a decent neighborhood and built in 2005 for $126k in Central Florida. Great deal!!!
- Pasadenan
- Contributions:21466
Well, as they say, if you don't want to represent a buyer nor seller on a "short sale", someone else will.
If it's not your nitch and expertise, I wouldn't want you representing me on the transaction anyway!
If it's not your nitch and expertise, I wouldn't want you representing me on the transaction anyway!
- Dan, "the_country_hick"
- Contributions:4699
A short sale has one important protection a foreclosure does not. The short sale has had the owner sign off on the deed. That means there should be no possible way that a lawsuit could reverse ownership down the road. Some foreclosures were not done legally and this reversal of ownership could be a very real future concern.
Now some banks are including an addendum that says you do not hold the bank liable for anything they said or represented about the property. That includes them having title to pass on to you. I would not sign that.
The problem with a short sale is that it takes forever to get a reply to the offer. Without legal considerations included a short sale is the worst option of the 2.
For those thinking that title insurance will protect you think again. It is possible that title insurance companies will go out of business if to many fraudulent foreclosures have to be covered. If that happens any protection bought and paid for will go away perhaps along with the house that was bought.
Now some banks are including an addendum that says you do not hold the bank liable for anything they said or represented about the property. That includes them having title to pass on to you. I would not sign that.
The problem with a short sale is that it takes forever to get a reply to the offer. Without legal considerations included a short sale is the worst option of the 2.
For those thinking that title insurance will protect you think again. It is possible that title insurance companies will go out of business if to many fraudulent foreclosures have to be covered. If that happens any protection bought and paid for will go away perhaps along with the house that was bought.
- Michael Emery, "MikeEmery"
- Contributions:7298
Two words that seem to go hand in hand with both short sales & foreclosures.
Deferred maintenance.
Deferred maintenance.
- Linda Strasberg, "L Strasberg"
- Contributions:2315
The purpose of our profession is to assist homeowners and homebuyers with their transactions. When a short sale vs a foreclosure is to the homeowners advantage, then that's what must be done. I don't think we should opt for the easy way out and leave homeowners in the dust because you want to close in 8 days vs 45. What if a home buyer can't afford to fix up an REO after they purchase it?
- Chris and Dick Dovorany, "Chris and Dick"
- Contributions:10
Short sales are no bargain. Most (not all) are in need of major repairs. It is much easier to negotiate with an actual seller than a group of new college grads sitting around a table in the bank. Would you want to sign off on a short sale and have your bank lose more money? I think not,
- Leslie Newman, "Leslie Newman1"
- Contributions:60
Yes, if you are trying to work with an unprepared Seller or their unprepared listing agent. Otherwise, I agree, you can get as good a price as an REO and often, the short sale property is in better condition.
- Chris Pray, "Chris Pray"
- Contributions:103
If the homeowner and listing agent have done their homework, they can be a smooth transaction and a great deal for the buyer! Sellers who just decided to put their home on the market, and have not done any of their homework and paperwork to be be approved for the short sale process, are setting up a lengthy process for themselves and the buyer. Without getting an approval of their hardship situation in advance, sellers are risking a long process with the possibility of not getting the lender to sign off on the short sale contract.
- Scott Riddle, "Scott_Riddle"
- Contributions:55
If you pick the right ones they are great. You usually get a better condition house and just as good of a deal. Scott Riddle Realty Direct [Contact info removed by moderator]
- Sharon Lewis, "Sharon Lewis"
- Contributions:3917
Agreed!
Is anybody tired of short-sales?
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- 5.0/5.0
- (11 reviews)
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