A short while ago, I posted problems on short-sale. Here is what we found from data on MRIS: LOW success ratio. This is especially true since the number of homes on the market for short-sale has more than one lien - that means more than one lenders to deal with.
The thing is there
are agents out there trying to help the homeowners by selling it
short - don't realize that "if" they're dealing with more than one lien (or
lender) - chances of the sale would be approved is minimal. Not only
that, I heard horror stories from agents who says that the banks
refused to pay agent's commissions at the end! Work for free? Come on.
Some lenders are not happy with short-sale, especially those holding seconds or third (if any). Short-sale pitted lender on the first lien against another lender on second lien (if you can track them) and it's a complicated process. MarketWatch reports,
As the housing market continues to weaken, the number of short sales is edging upward. Short sales currently account for about 18% of home sales, according to the National Association of Realtors. But it can be extremely difficult to get these deals completed. Unlike a traditional real-estate sale, a short sale requires the approval of not only the buyer and the seller, but also the mortgage-servicing company. In many cases, loans have been packaged into securities -- which means that the mortgage servicer must consider the interests of the investors who own the loans.
Deals can fall apart because the mortgage company rejects the price that has been agreed upon by the buyer and seller. Long delays in getting an answer from the mortgage servicer are another obstacle.
Gathering all the information needed to evaluate a short-sale offer can take time, says Patrick Carey, an executive vice president with Wells Fargo. The loan servicer must first determine whether the homeowner really can't continue meeting the loan payments, then get an appraisal or broker's opinion of the home's value. (emphasis added)
So if you see a listing that says "Third-party Approval" or "Short-sale" do more probing before you spend the time looking and working to make the offer. Better yet - run the other way. Read the full story.