Thanks for stopping by. As you can see by all the previous answers, it is not just here in California that finds agents reluctant to hop on the Short Sale bandwagon. Unfortunately, this "solution" is becoming more and more of a nationwide problem.
The two to four months that was mentioned as a time-line is actually, unfortunately in most cases an optimistic one. I have one client whose listing I took in February of 2008 and now here we are in June, 2009, we are still not closed, and I hasten to add that I am pretty good at getting these things done.
I think that there needs to be an expose' done on the flawed process because what is happening out there to buyers and sellers alike is ridiculous and, if you really want to know, in the case of the sellers in particular, downright criminal.
Because most lender's don't have functional systems in place to effectively handle these transactions, and also because they are in most cases poorly equipping their negotiators with the knowledge or authority to effectively preform their task, we are left with a tool that functions like a hammer without a head. A whole lot of energy gets expended on all sides but when the dust settles, what was broken remains broken.
Seller's of Short Sales are really getting the short end here as they can be held financially liable, to the tune of tens of thousands of additional dollars because of the continued descent in value of their home from the time the process starts to the time of its completion. Not everyone qualifies for the Mortgage Forgiveness Act, and for those that don't, every drop in value is an additional swift kick in the chops. Not to mention the added decimation of their already battered credit which is caused by the longer time lines and adding additional late or no pays to their records.
And, here's the best part, the lenders are not just hurting themselves here. Ultimately, it is you and me that will pay the price for their foolishness, with higher costs for everything from the interest rate we pay to purchase our homes to the additional fees that they will charge to try to recoup their losses.
All that being said, I still continue to believe that for some specific buyer's Short Sales remain a viable option as long as they know what they are getting into at the getgo. As a buyer on the downside, you will wait a hugely long time before you find out if you can actually buy the home you desire and what price you will be asked to pay. Then, when approval finally does arrive, you will be expected to move with the speed of greased lightening to get things closed. On the upside, you will get all of the disclosures about your future home that the foreclosure process denies you and you may get the home in better condition than if it goes all the way to the auction block.
But the biggest upside you get is the knowledge that you directly affected someone else's life in a positive manner. You helped become part of the solution to this current economic crisis instead of adding to the burgeoning problem. And, because most folks won't or can't wait it out, if you are one of the few who will or can, you may find the playing field oddly deserted when you get to the end game which means you may ultimately face little to no opposition or competition from other prospective buyer's.
So, that's my personal take on the "why". Once again, as long as everyone knows what we are getting into at the start, I am still willing to aid my client's who wish to pursue them and in 100% of the cases I have been involved in we have met with success on both sides of the table. (Even the aforementioned deal that has been plodding along since February, '08 is going to close successfully.)
Oh, and one more thing, if you run into an agent who doesn't want to do a Short Sale with or for you, don't get mad at them, thank them for their honesty and move on to one who can a d does. There are a whole lot of folks out there with real estate licenses who shouldn't even be helping folks buy dollhouses let alone real ones and their ineptitude compounds an already messy problem.
Thank you again for stopping by. I hope this helped.
Take care and have a great day!
Tisza Major-Posner, Realtor DRE#01784679, IVPG Realty (909) 837-8922 or (213)392-4084