One of the most common questions I get when people are looking for deals are short sales. The first thing you need to understand is that short refers to the current owner selling their home short of what they owe the lender. Unfortunately, they are also the transactions that take the longest to close.
That could possibly be changing soon. Recently there was legislation introduced that would cut down the amount of time that a short sale could take.
“The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.
The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer will be limited to one extension of no more than 21 days.
The bill will also allow the buyer to be awarded $1000, plus “reasonable” attorney fees if the Act is violated.”
While 75 days for a response may seem like a long time I will say that overall it would be an upgrade over the current system. Still, there is no legitimate reason that the deadline can’t be closer to the 45-days that was part of proposed legislation in April of 2011. This current bill still has a long way to go until it’s passed, however it’s hard to argue that speeding up the process would be anything but beneficial to the excessive amount of vacant homes around the country that are waiting for new owners.
As someone who spends every day in the real estate industry I can’t begin to explain how frustrating dealing with a short sale can be. As it turns out, there’s many others out there who would also like to see the short sale process fixed:
“Equi-Trax released a survey last year on the issues real estate agents face when completing short sales. Guy Taylor, CEO at Equi-Trax, said 71.9 percent of respondents reported that a short sale can take four to nine months to complete, and they think that is simply too long.”
The survey also found that 18.2 percent of deals require less than three months to complete, with 10 percent requiring more than 10 months.
When agents in the survey were asked to how the short sale process can be improved, 57.6 percent said lenders should take less time to close transactions, 14 percent said borrowers should be better educated about short sales, and 40.4 percent said both of these changes are necessary to improve the process. ”
Do you have questions on buying short sales in the Richardson and North Dallas area? If you'd like to speak to a real estate expert feel free to reach out to us. In addition to the video below, head on over to Real Estate Video Vault and check out a ton of videos about buying and selling a home in the Dallas area.
Short Sale Video
Todd Tramonte Home Selling Team
Cho, E. (2012, February 20). Proposed bill to speed up short sale process and prevent foreclosure. Retrieved from http://www.dsnews.com/articles/bill-to-speed-up-short-sales-process-and-avoid-foreclosure-2012-02-20