What is so ‘Short’ about Short Sales?

Of the current inventories nationwide, Pre-Foreclosure Sales, or Short Sales are the emerging dominion to their counterparts, The REO. Of all the sales transactions in real estate today, short sales are being processed in record numbers. What has plagued homebuyers and the marketplace has been the amount of time these purchases take to complete.

Often these sales require the mitigation of more than one lien in order to completely negotiate the settlement. Often, undiscovered Tax liens or unrecorded judgments surface in the middle and cause delays or even dissolution.

Generally it is the responsibility of the Listing Agent to facilitate documents and communicate with the Seller Lenders. While Agents are placed on hold for long periods of time, the mortgage companies are processing hundreds if not thousands short sale files that statically have the odds of a less than 20% closing ratio. By the time many of these sales are approved, the Buyer has since purchased elsewhere.

Real Estate Agents must know what to expect when working Short Sales and be prepared to properly handle the obstacles. A good time to discover all that will have a financial impact on the Bank net is at the time of listing.
To accomplish a short sale smoothly, a listing agent must implement a step-by-step process, identify what steps a homeowner needs to take to get qualified as a Short Sale Candidate and get them approved through their lender.

As a result of HAFA, banks will have to streamline their process to help distressed homeowners achieve a short sale in a more expedient manner. While many in the industry are waiting for the new guidelines, lending giants such as Bank of America are outsourcing to asset management services which liquidate REO inventories.

Wells Fargo Bank has recently assigned a healthy percentage of its nonperforming assets to its Wachovia Bank Program. Wachovia is a prime example of what HAFA is hoped to bring to the Short Sale process. The homeowner gets a quick response to their desire to do a short sale. There are no hassles, no red tape and no concerns about deficiency judgments, so they say. Other banks will likely follow Wachovia's lead going forward to compress the timeline to complete the approval process.

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