There is little doubt among experts that the housing market
is showing resurgence in the first half of 2014. This is clearly great news for
sellers with equity in their home, but also presents tremendous opportunities
for sellers who are underwater. Increasing prices certainly lift many borrowers
into an equity position, but it gives borrowers who remain underwater a better
chance of receiving an offer that will be approved by the lender. Whether the
lender is looking for a pay-off of 86%, 88%, or 99% of the fair market value,
higher offers are more likely to be approved. It has been this way since short
sales first began and will likely always be that way. Lenders want to mitigate
their losses as much as possible and high offers allow them to do that.
In addition to the improving market conditions, there are a number of factors that are making short sales more streamlined, successful. and the preferred route for lenders and sellers underwater.
First, lenders are catching up to the “New Normal” and many
now have systems in place to efficiently review offers. In fact, this
"New Normal" dictates that lenders first look at the short sale
analysis on a delinquent account before they consider foreclosure . . . a
paradigm shift in the way financial institutions handle delinquent accounts and
distressed mortgages. This is a radical shift to the way lenders used to
approach these accounts before the real estate meltdown in 2008. For example,
many of the programs and processes now in place make short sales painless and
more sophisticated.
Bank of America now has an “Agent Resource Center” that
provides basic information on the short sale process. https://agentresources.bankofamerica.com/shortsale.
Although it is not comprehensive of all the nuances of short sales, it presents
outlines of and makes some of the required documents easily accessible.
Second, buyers and sellers now have more reasonable
expectations on how the sale will proceed and how much time may be involved. Of
course, these vary from one short sale to the next, but there are now standards
in place. Realistic expectations keep all parties on the same page and
cooperating toward a common goal. This simple intangible is remarkably
important to success.
Third, short sales are no longer the “Wild Wild West.” There
are now agents, lawyers, servicers, investors, and title companies with
experience in short sales that can move the process along more efficiently.
This bandwidth of knowledge shared by professionals across all these fields has
benefitted everyone, especially sellers.
The improving market is great news for everyone, TRADITIONAL
REAL ESTATE TRANSACTIONS… AND… SHORT SALES!
