After the chaos of 2008 and by the beginning of 2011, many banks have worked to better organize themselves around the short sale process. For others, the right hand still doesn’t know what the left hand is doing. In some instances, home sellers have been told by a representative of the bank that their short sale is going to be approved, only to discover that another department of the same bank has finalized their foreclosure– eliminating their ownership thus canceling the sale.
Not all short sales are disrupted by the foreclosure process. In fact, a property can still be considered a short sale even if the seller has never missed a payment. “Short sale” means only that the property will sell for less than the amount owed, not that the property is delinquent in its payments on that loan.
Even if foreclosure is not a factor, time is a consideration. Short sales, regardless of the level of hardship, still take longer than a traditional sale. The process is driven by how the bank is set up to make its decisions and this varies bank by bank. Aware of continued difficulties with short sales, the Treasury Department recently released a new directive offering revamped short sale incentives to lenders. The directive also includes stricter time lines for approving or rejecting a short sales.
Tips for Homebuyers:
- If you are pursuing the purchased of a distressed property, make sure you get as much information, the best advice and the best representation possible as you move through the transaction. We can help http://berkhills.com
- If pursuing a short sale, know that a foreclosure could still disrupt your sale. Ask if the seller has received a Notice of Default.
- In most cases, be prepared for a long “short” sale process.
- Remember that your title insurance policy offers essential after-sale protection.