While obstacles to short sales remain, real estate practitioners say the process is becoming more efficient. Rather than waiting six months or more to push through a deal, agents say banks are more willing to negotiate prices up front.
My gut feeling is that short sales seem to be the preferred avenue for distressed property now, says Cindi Hagley of San Ramon, Calif.-based Windermere Welcome Home. It's cheaper for [banks] to do a short sale than go all the way to foreclosure.
The short-sale process has become more manageable now that banks are willing to pre-approve prices, reach out to underwater borrowers who have listed their homes for sale, implement Web-based systems that manage the short sale process, and add staff dedicated to short sales.
Additionally, the U.S. Treasury is set to implement a streamlined short sales framework and offer incentive payments of $1,500 to home owners and $1,000 to both loan servicers and second-lien holders.
Borrowers also prefer short sales because Fannie Mae requires them to wait only two years to own another home or even less than that if they were not delinquent. By contrast, those who lost their homes to foreclosure have to wait five years.
Source: San Francisco Chronicle, Carolyn Said (10/21/09)