Obama Seeks To Accelerate Short Sale Transactions
In early December 2009, the Treasury Department outlined a new program designed to standardize and streamline the short sale process nationwide. A short sale is when a homeowner attempts to sell the property below the payoff amount of all the combined secured notes. The seller will often times market the property at a significantly reduced price in hopes of attracting a buyer. This is often a last ditch effort to sell the property before a bank foreclosure or trustee sale. If a buyer for the home is found, a fully executed contract will be sent to the bank for consideration. The contract is contingent upon bank approval. It sounds easy enough, but successfully closing on that bargain property may be next to impossible with all the variables that can possibly kill the deal.
An experienced real estate agent is the first ingredient to a successful short sale. Follow up is extremely important along with making sure the sellers short sale package is complete with all supporting documentation as well as a hardship letter. Communication with the banks asset manager is paramount. The agent needs to know exactly what the lender is looking for in terms of buyer and seller documentation as well as the net proceeds required to get notice of approval, which is the final step before you can even open escrow. Sometimes the lender will come back with a counter offer that is unreasonable to the buyer. Meanwhile, approximately 3-6 months have passed and the home still hasn’t progressed towards a sale. This is if the buyer doesn’t completely lose patience and write an offer on another property.
The new streamlining plan incorporates uniform documentation to be filled out instead of local specific addendum’s and notices. Financial incentives include:
- Sellers get $1500 to offset moving costs after the sale
- Buyers or investors receive $1000
- Mortgage servicer receives $1000
- Junior lien holders receive $3000
- Real estate agents get to keep their full commissions instead of settling for a reduced amount as required by the bank
Time will tell if these measures will bolster sales nationally. Currently, Arizona Regional MLS reports 42% of their residential active listings being marketed as “short sale” or “lender owned”. Trustee Sales have been a fantastic alternative for investors with access to private lending or cash to buy property quickly at a deep discount. The short sale method is simply not attractive any longer in it’s current state.
If you’re interested in learning about the trustee sale process in Arizona contact Don Juvan with Alliance Bid Services LLC at 480-444-6110. Daily foreclosure lists are available and bid representation is offered for all Maricopa and Pinal County Sales.