Ban All Short-Sales !

June 9, 2008

Let’s start a petition to Ban Short-Sales. short sale stop

At least, get the NAR and the MLS to not allow listing short-sales until their is a bank approval.
Here’s the reasoning.

Most short-sales are not , in fact, short sales. They are distressed sellers who ask a Realtor to list a home at a price that if sold would net less than the amount of money owed to the bank. However, the bank has not, and in as much as 80% of the cases, will not approve the short-sale.

As a result we have, buyers and sellers (and Realtors, though I don’t think anyone but Realtors care) wasting time, marketing properties and negotiating contracts for transactions that will never close. Further, we have an extraordinary amount of homes on the market that are hurting pricing that again will not sell.

Lets Ban short sales. Allow the homes go into foreclosure. Let the banks clean them up, and sell them as REO (bank owned / acquired property). REO sales are quick , easy, pricing (for the most part) is accurate and the banks want to sell these homes quickly and get them off the books.

I expect the result of such a proposed ban would get the bank to more quickly approve short-sales and expeditiously facilitate the transactions and contracts. Instead of taking, 60-90 days (or more) . The process would be and should be (nearly) as quick as the REO process.

Brokers/agents/buyers and sellers would be much more eager to respond and involve themselves with ‘approved’ short-sales thus making the marketing success and speed a valuable tool in a challenging market.

If the banks won’t co-operate then it does not make sense to spend our buyer’s and seller’s time to jump through hoops , spend time , and commit emotionally to a transaction that has a small chance of closing.

-james wexler

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If you would like the opinion of some other short-sale experts I recommend:

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Copyright © 2008 By James Wexler, All Rights Reserved. *Ban All Short-Sales !*

Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs

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Written by James Wexler · Filed Under Articles, Buyers, Sellers, Short-sales / Foreclosures 

Comments

6 Responses to “Ban All Short-Sales !”

  1. Leif Swanson on June 9th, 2008 5:34 pm

    James,
    I agree about the fraud of short sales. They are a useless ray of hope to sellers in most cases. In Phoenix metro area, only 2.9% of short sale listings sold in May 2008 (versus 10.3% for all sales), only 2.9% in April, and only 2.5% in March. I wrote a longer post about short sales on my blog: http://uglyhousephotos.com/wordpress/?p=1661.

    Even with “approved” short sales from the banks, there’s no guarantee the banks will respond. So the seller gets his/her hopes up again, only to have it dashed again.

  2. Banning Short Sales Movement Begins | Oceanside Real Estate Weblog on June 9th, 2008 8:57 pm

    […] Well, it’s just an idea at this time. However, in the public interest it is the best idea I’ve heard anyone come up with to deal with the ugly reality that short sales present to distressed owners, buyers, and Realtors. My complements to James Wexler for his article Ban All Short Sales. […]

  3. Paul Cauthen on June 9th, 2008 9:07 pm

    http://hangtenrealestate.com/2008/04/05/short-sales-something-fishy-about-those-things/

    Great article. I’m sure the vast majority of Raltors will agree.

  4. John Sabia on June 10th, 2008 7:54 am

    Good article James - If you think about it, short sale contracts are technically not executed contracts because the contact lacks the lender’s signature, which per short sales, is required. Lenders have made themselves a party to the contract.

  5. Jason Sandquist on June 10th, 2008 5:17 pm

    James-

    Short sales used to be of some hope to the homeowner but now just lead to false pretenses. They go nowhere especially if you are working with Wells Fargo,

  6. Bob on August 26th, 2010 7:07 am

    Our short sale horror just ended. The unit in Cocoa Beach was listed at 225,000.
    We started at 200,000 and after 9 1/2 months of horrible problems with negotiators,
    lenders, investors, (which changed constantly) our final offer was 240,000.
    Sun Trust kept having new BPO (appraisals) and just this week approved a price of 285,000 which we rejected. We were CASH buyers. Banks will not loan on this property as over half of the 15 units are rentals and the developer cannot sell 3 of them and the condo fees are over $500 a mo. and some owners are behind.
    Sun Trust treated us and our realtor and the negotiator for the owners and us.
    Was a terrible 9 months of waiting (by the way we were very patient and kind).
    I will NEVER even look at a short sale that is not already approved price and never deal with Sun Trust on anything and will tell all our friends and family about this terrible experience. My brother-in-law has ready removed all his funds and closed his accounts with them.
    My advice- DO NOT EVEN LOOK AT SHORT SALES.

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