Some Realtors in their zeal to secure a listing and sale do not work with the bank in advance. Then when an offer is tendered, the bank is surprised. For a successful short sale to take place, the seller should establish his “hardship” with the bank. An income shortfall should also be established. Perhaps a modification should be attempted.
Many banks have in place a fast track short sale process. Wells Fargo/Wachovia and Bank of America/Countrywide do. Once hardship and income shortfall are established, with very little paperwork, these banks will have a Brokers Price opinion done and provide the seller with a preapproved sales price. They will respond to all offers within 10 business days. Short sale bank managers are in place to respond quickly.
The above mentioned banks hold the vast majority of America’s mortgages. Bank of America receives over 30,000 calls per day. The average foreclosure without damages to the home and theft of appliances, etc. costs the bank $60,000 to $70,000. They would much prefer a short sale to a foreclosure as it is cheaper. Banks are now providing moving expenses to their short sale customers. They may excuse all deficiencies on primary residences.
Banks are being made the villain again. Our Government required them to lend money to people who couldn’t or wouldn’t pay them back. Government also encouraged them by telling them they could sell these loan portfolios to Freddie Mac & Franny Mae. The officials running these agencies then cooked the books to receive large personal bonuses ( These same gentlemen are now part of the current administration). Freddie & Fannie failed. The banking and housing crash followed. All had to be rescued and bailed out by the US treasury – Freddie, Fannie, and the banking industry.
Real Estate will recover as will the banking industry. Short sales are part of the process. Those of us in the business can make it run smoother if we just do our homework. Those of us who don’t will probably face lawsuits in the not too distant future. Blaming the banks for that will not hold water.