Short Sale Approvals: Are we moving forward?

This may be a good time to take a review of where short sales are now, with only 2 more months left in 2009.

The Short Sale is still the most economical solution to avoid a possible foreclosure. This does not mean it is the easiest. It does not mean that you will not endure some stress while going through this process and it surely does not mean you will not need to have a barrel of patience in order to complete this process.

The market is loaded with Short Sale listings. Some listings are new, but most have been on the market for over 30-45 days and holding. There are plenty of the short sale listings that are now in short sale contingent status. Short Sale Contingent means that the agent has received and presented at least 1 offer to the bank/lender for short sale approval. In most cases, when the status of the listing is Short Sale Contingent you can still submit offers to the agent. It will depend on where the agent feels the negotiations are if that agent will submit your offer right away or if it will be presented later on -if the offers that the bank/lender have before them not making them happy enough to approve the sale.

So while there are deals out there, when making an offer for a Short Sale listing keep in mind that the bank is probably not going to approve an offer that is way below the market value of the property. Some agents will list the property at least 10% below the low end of the market value, but that does not mean the bank/lender will accept an offer with that strategy. You can bet the bank/lender will be looking more at the higher offers.

The bank will not rely on the listing agent's evaluation of the property. They will hire their own appraiser or agent to do a Broker Price Opinion. So if your offer is lower than either, the bank/lender may counter your offer or simply deny it. Rarely will they approve it if it is far lower than the evaluations they have obtained.

I have received calls asking which bank I think is the hardest to get a short sale. I cannot answer that question because it depends on not just bank - it's the negotiator and how much of a workload, concern, knowledge, care, or time they have to put in on the file. GMAC does have tricks that they use (at least in my experience), they take forever to review the file, claim that they did not get documents that you know that you faxed or sent to them a couple of times, then they will not contact you personally until the time is almost up for the trustee sale and ask you for all these documents that will probably take you longer than what time is left. But... hold on! Bank of America, Wells Fargo, National City, etc will do the same!

So in summary... where are the short sales here at the end of October 2009? They are increasing and we will see more and more short sales coming on the market -- the big question still WHEN WILL THE BANKS Stream-line their short sale process and treat these requests seriously?

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