Short Sales and Forclosure Delays
I recently read an short article that pertained to short sales and forclosures and the reason for the long delays or lack of action on offers some of us have on record for short sale properties. While its frustrating trying to keep our customers informed during the process, were not used to having to pass on to clients that we have no information available and can't locate a source for any bit of information. We pride ourselves on being sources of information, but at this time were all at a loss of words. Patience has been the theme for everyone involved in a short sale offer, but the time duration to maintain this patience wears thin and becomes frustrating for everyone. Some advisors say stay clear and run in the opposite direction when you see a short sale. Others comment why not go for it and see if you can land a property on the cheap when the process comes to a conclusion. Pick your style...each one has its pros and cons, and the final decision has to be a balance with your comfort zone in the stress you can handle. Here are a couple hightlights from the article, and adds just another thought for the long delays in clearing out these properties in some regions of the country.
Many of the properties have title issues that need to be resolved.
Many of the properties are in states of utter disrepair.
A number of states have strict redemption-rights periods, which prevents the lender from reselling the property.
A few states have extended the length of eviction proceedings.
It is believed that many banks are holding the properties off the market in order to defer losses since they aren't required to adjust asset prices until the actual resale of the property.
Some wonder if the industry is holding back the inventory to create leverage with the government in order to force the creation of a "toxic bank" or RTC-like entity that would buy the distressed assets at 50 to 60 cents on the dollar rather than the 30 to 35 cents available on the market today.