Will new federal short sale guidelines, help the process?

March 8th, 2010 by Marty Millner
Categories: Real Estate News
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Many buyers that I work with, when searching for homes in Yardley, Newtown, and all over Bucks County, eventually run into a house that they want to see, and we find out that the house is being sold as a, “short sale“.

For those not familiar with what a short sale is, a short sale basically happens when a seller owes more on a house, than what the house is worth. For example, if a seller in Yardley, owes 300,000 on their mortgage, and the house is worth 250,000, the mortgage on the house can not be satisfied with the sale price. The seller would have to bring money to closing, in order to sell the house. If the seller did not have the resources to do that, the only way the house could be sold, is through a, “short sale”. The bank would have to agree to accept less than the full amount owed on the mortgage.

In the markets that I focus on in Bucks County, we have fewer distressed property sales, than in many parts of the country.

However, I do encounter short sales, frequently.

In general, working with banks on short sales, has been extremely frustrating. As a generalization, the banks often take an unreasonable amount of time to make a decision. In many cases, the decisions they make, don’t make sense, from a market perspective. I had a client make an offer on a short sale, many months ago, on a house in Yardley Boro, and the bank refused to neogtiate the offer. The house sat on the markaet for many more months, and the bank eventually sold the house for about 50,000 less than what they turned down!

For the average buyer, buying short sale properties, is usually extremely stressful. As I mentioned earlier, the process often takes longer. In addition, the banks generally sell the house in its current condition, which means that a buyer can make the sale contingent on a home inspection, but the bank will not agree to fix anything.

I have been amazed at how dificult most banks make it, to deal with short sales.

This video outlines some new, federal guidelines on short sales, that will take effect in April.

I wonder if this will help?

This entry was posted on Monday, March 8th, 2010 at 8:53 am and is filed under Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.