Short Sales are here to Stay

Get ready for the short sales. According to a Treasury spokeswoman, Treasury officials will soon announce a $2,500 subsidy ($1,000 to the servicer and $1,500 to the seller) to encourage short sales as a way to clear the excess inventory. The fees are designed to help compensate the servicer for the extra effort, and to incent the seller to be cooperative and leave the home in good condition. Presumably, the Treasury is trying to help facilitate a transaction that will result in less loss to the lender than in the case of a foreclosure.
To date, short sales haven't been particularly effective for a variety of reasons, including:
1. Banks have been slow to approve the high bid, particularly when it is below the last appraisal in the banks' file.
2. Realtors typically don't want to deal with all the extra work involved in a short sale.
3. Buyers typically don't want to deal with the length of time involved in a short sale, which can take 4 to 5 months because of the bank bureaucracy.

In Anthem, AZ, 61 percent of our market are short sales. Banks are not releasing inventory so many buyers must wait until they get approved. I utilize a 3rd party to work with the banks and strongly believe this is the best practice to get these approved. If an agent is doing it themselves, it may not be the best solution since many agents do not have the time to call the lenders. Take advantage of short sales if you can wait becuase often times you will get a better deal but you must wait 2-4 months in most cases. Call me with any questions.