Foreclosure Fix: Short sales offer solution to flood of foreclosures
Posted by Annalisa Burgos | June 16, 2009
Despite its name, a short sale is by no means a “short” process. But unlike what you may have heard, getting a short sale approved by your lender is not as hard as you may think — if your real estate agent knows what they’re doing.
In order to orchestrate a successful short sale, you need a master negotiator, says Troy Huerta, short sale division leader at Coldwell Banker Residential Brokerage in San Diego. “Many agents forgot how to negotiate. There was no negotiating in the past. You would list a home at a ridiculous price and someone would pay it.”
Those days are long gone. Home values are falling. Unemployment is at 9.4 percent. And according to RealtyTrac, there were more than 321,000 foreclosure filings in May, 18 percent higher than a year earlier. That’s expected to get worse.
But there’s a way to help ease this flood of foreclosures, Huerta says. Do more short sales.
In the past, lenders have been reluctant to do short sales. And why would they? They stand to lose a LOT of money. But the reality today is that if a lender doesn’t do a short sale, it may get stuck with a property that is harder to sell or will sell for less than it could have gotten. (A buyer is more willing to buy a short sale in good condition than a bank-owned foreclosure that needs a lot of work.) Not to mention the cost of pursuing the foreclosure process.
Even Fannie Mae felt short sales could help reduce foreclosures. It launched a pilot program pre-approving short sales for homeowners in Phoenix and Orlando.
Now, lenders should be more motivated than ever to get these deals done — as part of President Obama’s economic stimulus plan, the federal government will pay lenders up to $1,000 for each completed short sale or accepted deed-in-lieu of foreclosure.
READ HUERTA’S TIPS FOR BUYING AND SELLING A SHORT SALE…
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RealEstateJoe
June 16th, 2009 at 4:08 pm
Many agents are finding a niche right now in specializing in short sales. That is where most of the market activity is now. Yes, it’s more work, but there is also a good potential income source just now for agents who are not able to make larger commissions in the high priced, and, right now, less active markets.
I have said for some time, that it would behoove lenders to put some time and effort into streamlining the process. Setting up specific departments with clear guidelines for faster short-sale approvals. It would greatly decrease their expense in processing them as well as moving a real estate asset from the liability to the asset column on their books.
Laura Sampson
June 16th, 2009 at 4:26 pm
And if only banks would recognize the importance of curb appeal & staging, even good-condition short sales can sell quicker and for a far better selling price than a foreclosure or a un-staged short sale.
real estate web 2.0
June 26th, 2009 at 8:28 am
news about shortsale is very helpful to beginners in real estate industry.