A Better Way To Do A Short Sale
In the past few years short sales have been long, frustrating, and undependable. The sellers had to prove they were desperate in order to qualify for a short sale. The listing agent had to spend hours trying to figure out who was able to make the decision and whether or not the documents were even received. They buyer’s agent had to wait endlessly for an answer while his or her buyer threatened every day to bail. The closing statistics for short sales have been estimated at 10-30%. Many people felt why bother?
So why should you bother? For some reason banks are getting on board with the idea that allowing a seller to do a short sale is a better deal for them than foreclosure. In general banks get 45 cents on the dollar for a foreclosed home and 75 cents on the dollar for a short sale. It has taken a long time for the banks to get on board with short sale approvals, but short sales are now getting approved and some banks have started trying to make the process more efficient.
Bank of America, who has taken over Countrywide is now using a platform called Equator.com for their short sales. This platform started as a method for asset managers to process bank owned properties with realtors and is a very effective method for all parties being able to see in real time where the file is and what else needs to be done. As anyone knows who has dealt with a Bank of America or Countrywide short sale, it can take a month after an agent faxes the short sale package to the bank for the bank to upload it onto their system. Now it is uploaded directly on the site and everyone knows it is there. Everyone will always know where they are in the process so no more allocating 3 hours a week for follow up per file.
Wachovia wins the prize for the best short sale system. Twenty five percent of Wachovia loans are 60 days or more past due, so they have decided to encourage more short sales. They have a system that will get the sale approved and closed in 45 days or less. Underwater means that more is owned on the home than the home is worth. Some estimates put the number of underwater homes in this country as high as 50%. Given those stats, Wachovia has made a decision that if someone wants to sell short they will consider it. This is not to say they will just give a home away, but if a home has $700,000 of loans on it, and it is now worth $500,000, Wachovia will, at times, let someone buy it for close to $500,000 and might consider forgiving the other $200,000 debt, and do it in a reasonable amount of time. Plus, they will even give some sellers that qualify for this program up to $5,000 for moving expenses.
Wachovia bought World Savings so this applies to World Savings loans as well. Wachovia was acquired by Wells Fargo but as of now Wells is not doing the same thing with short sales. Hopefully this program with Wachovia will work well and spread to not only Wells Fargo, but to other banks as well.
If you have any questions about short sales, or other real estate related questions please feel free to contact me.
Intero Real Estate Services