I’ve written about short-sales on this blog in the past. A short-sale can be a good alternative for all parties involved, but keep in mind, it can be a very frustrating experience. As a buyer, you are now negotiating with two (or more) parties; the homeowner and the lender(s).
The lenders can be very difficult to work with. During this unprecedented real estate market, the lenders are overworked and lack experience in short sales. Here is an excerpt from a recent USA Today article on the perils of short-sales.
But many short sales are faltering, largely because some lenders may lack the internal staffing, expertise and systems to process such sales in a timely fashion. And short sales can be complex, especially if they involve home-equity lines of credit or other second liens held by different lenders, who also must agree to take less than the amount they’re owed from a home’s sale.
Several lenders acknowledge that banks have been part of the problem, in part because most have done so few short sales in the past that they’ve faced a steep learning curve.
“About half of short sales never close. We see it as a big lost opportunity, and we need to improve the rate we close them,” says David Sunlin, vice president in charge of short sales at Bank of America.
Uncompleted short sales that go to foreclosure are costlier for lenders and homeowners. For lenders, a short sale may save as much as 30% of the expense incurred by going to foreclosure.
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