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Jonathan Dalton
REALTOR
ePro, SFR
602-502-9693

One More Thought on Eliminating Short Sales from the Real Estate Markets

One More Thought on Eliminating Short Sales from the Real Estate Markets

This morning’s RE/MAX update included an article from founder/chairman Dave Liniger. The headline was that there needed to be more short sales in 2011. The gist was there needed to be more successful short sales and for this to take place loan servicers need to have better processes in place.

It’s rare I find myself disagreeing with Dave – he has forgotten more about real estate than many of us ever will know – but I do believe he’s wrong here, if only because I’ve reached the conclusion that lenders and loan servicers are fundamentally incapable of becoming adept at processing and approving short sales.

Their incompetence is self-created from a basis of apathy. Lenders have nearly zero motivation to approve short sales; if the argument about the lender seeing a lesser bottom line loss on a short save versus a foreclosure mattered, the processes would have improved immediately. Because there’s no motivation to approve these sales, there’s no need to put together a coherent, comprehensive, viable process.

And that is why I’m arguing that lenders and loan servicing companies need to go full bore the other direction and refuse to consider any short sales.

There’s no sense dangling sellers and, less importantly, buyers along for months on end just to see the house end up exactly where it was headed in the first place – being sold in a trustee’s office or on the courthouse steps as a foreclosure.

Stop the illusions. End the short sales.

Comments

  • Michele Guss says:

    You will be surprised to hear that I after my comment on your short sale post yesterday, I received an e-mail from the listing agent stating the seller’s bank had given verbal acceptance (after 4 counters back and forth) to my buyers short sale offer. I am waiting for final approval and paperwork in WRITING so we can schedule inspections.

    I still have mixed feelings about short sales. In my experience, 9 times out of 10 the outcome is not favorable for the buyer or seller after alot of waiting.

    And welcome to Thompson’s Realty too!

  • Thanks, Michelle … and glad to hear it. Hoping you’ll get the approval and the paperwork and that this one closes.

    Taking a step back … so the seller gains, well, next to nothing. Credit still is shot from non-payment, the few points probably won’t matter a great deal.

    Buyer gains a property at around market value, which could have been accomplished through a bank-owned or realistic seller. Maybe not now, but it would have happened.

    No dispersions on you, mind you … you did as your buyer asked after doing your best to educate him or her about the process. But in the larger scheme, did the short sale accomplish anything for anyone that wouldn’t have happened had it never happened and the home instead went to foreclosure?

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