As anyone who has worked with me knows, I have avoided getting involved with short sales.  The prospect of having a short sale agreed to by banks was typically a long involved one that often ended in frustration for the buyer, seller and  yes the realtor.  One of my recent clients can personally attest to this.  Jen had put an offer in on a property in February.  She was still waiting to hear back from the bank in September when she and I first met.  Jen had fully expected to be settled into her new home by now.  In the interim, prices had started to go back up due to our strengthening local market.  Fortunately, when we began looking at homes, I didn’t have to give Jen my anti-short sale  discussion.  She already understood!  Within about 2-3 weeks of searching, we found what she was looking for in a home, ratified a contract and will be settled before the end of October.  Congrats!!

Now the banks are apparently going to make it even harder to get approval for a short sale.  The following article appeared in Weekly Real Estate News.  Just remember the old adage, “If its too good to be true, it probably is.”

Daily Real Estate News  |  October 9, 2009  |   Share

Banks Making Short Sales Tougher
Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.

When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.

Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.

“It drives me up a wall,” says Robert G. Hertzog of Summit Home Consultants in Phoenix. “[The bank is] holding my client hostage.”

Source: BusinessWeek, Christopher Palmeri (10/09/2009)