Questions abound when it comes to short sales in the Phoenix real estate market; nearly all deal with how the process can be shortened, the bank’s motivation and confusion about the real meaning of the price listed in the MLS.
Some of the most common questions center around the idea of cash – whether a cash offer will speed the process as it will for almost every other kind of sale – or, seemingly just as often, wonder at why the bank is taking weeks or months to approve a sale to someone offering cash.
The simplest answer when it comes to short sales is the one no one really wants to hear:
The bank doesn’t care if the house sells or not.
Though short sales require the approval of the bank – since the owner is upside-down on their house, the sale can’t happen unless the lender agrees to write off the difference of the mortgage balance and the sales price – the bank isn’t party to he discussions leading up to the decision to sell a house as a short sale.
Sure, it’s possible someone in the lender’s short sale department will suggest an owner try a short sale but that suggestion falls far short of actual agreement on the sale. And since the lender hasn’t agreed to a short sale at any price, much less the price being offered based on a below-market-value sales price created by the listing agent, any buyer – even those offering cash – have to sit through the entire lengthy process.
Think of it as someone coming to your front door offering to buy your car – except your car isn’t for sale. Oh, and they want to give you $5000 for a 2008 Escalade. Just because they’re offering cash doesn’t necessarily mean you’re going to be motivated to sell the car. Add some financial distress to the situation and it’s possible you’ll consider it, but this isn’t going to be a snap decision by any means.
Before approving a short sale, a lender is going to take its time to make sure that the seller is unable to continue making his or her payments. Anyone can write a hardship letter; the proof is in the financials.
Offering cash isn’t going to speed the process because, at the end of the day, it’s not about you the buyer. It’s about the seller and the lender. You’re just along for the ride.
[tags]Phoenix real estate[/tags]