SHORT SALES–THE NEW “NORMAL”
Short sales are now becoming more and more appealing to banks throughout the greater Boise-Nampa Metro Area and the United States. Larger banks, such as Bank of America, are ramping up their short sale departments by adding 3 additional servicing locations in order to help facilitate short sales and avoid additional inventory weighing down their books and cutting into the servicers and investor’s bottom line.
Finally, banks are getting smart (or smarter). The foreclosure process through the re-sale of the home as a “bank owned property” takes a substantial amount of time and money. Banks avoid the legal, maintenance and re-selling costs by approving a short sale rather than allowing the home to be sold at a trustee auction.
A short sale could take as long as six months approximately 1 year ago. Today, the short sale process from the submission of the offer and seller financial documents to the approval letter ranges from 30-60 days—depending upon the servicer of the loan. This said, banks are going to greater lengths to review and approve short sales in a timely manner.
Proceeding with a short sale rather than allowing a home to go through the foreclosure process is good for the owner, the purchaser and the local real estate market. Homes sold as “short sales” typically are in better condition than bank owned property and also help keep the banks inventory low. In turn, the lack of additional foreclosed upon property hitting the market helps to maintain current property values.
Although short sales do damage credit (minimally, however), the damage done to credit if a home is foreclosed upon is very substantial. In fact, an owner that has his/her home foreclosed upon cannot purchase a home for at least 7 years. However, those who complete the short sale process may be able to purchase again w/in 2 years (depending upon the circumstances of the short sale and credit scores).
Short sales aren’t difficult as long as you have an experienced Real Estate Broker helping with the process. Items needed to submit for short sale approval are as follows:
1) Hardship Letter
2) Most recent 2 bank statements
3) Most recent 2 tax returns
4) Most recent 2 pay stubs
5) Financial Analysis (document which states your monthly income and expenses)
Please call me directly if I can answer any additional questions for you about short sales or assist with the sale of your home. Also, the following link contains a recent video which discusses the lending institutions stance on short sales.