It is no surprise to agents like myself who have been dong short sales for a few years know that banks REALLY do prefer short sales… in spite of what many bank employees and inexperienced or novice short sale agents may say.
If a fair market value offer is in hand or close to fair market value is being offered, it is usually a better deal to short sale now rather than foreclose later because to foreclose on a home, a bank has to go through the legal process which incurs additional fees and months of time in order to actually foreclose on a home. Once they foreclose on a home, they often have back taxes to pay (Uncle Sam always gets paid), back and current HOA dues to pay, home clearing/clean-up costs, eviction or cash for keys costs if the homeowner or tenants are still in the, carrying costs like property clean-up, upkeep, utilities, etc. On top of all that, they still have to hire an agent to list the property as well as pay the buyer’s agent a commission on the home. Sometimes, lenders have to hold a property for a certain period of time if there is a redemption period in which the homeowner can come back and reclaim the property. Time=Money and the real decision makers at banks understand the concept of “first loss, best loss.”
Sometimes employees at the banks do not understand numbers and in order to get an offer accepted, sometimes even after a file has already been declined and closed by a negotiator, we have to get the numbers in front of someone higher up who understands numbers and who can make a decision on their own without asking permission. And yes, a file can often be resurrected if the numbers make sense. A closed file one day can be an approved file the next.
A study by Clayton Holdings shows that a short sale is MUCH better than a foreclosure for the banks. (To read a full report on the subject CLICK HERE)
Thanks to the guys at Short Sale Genius for bringing this study to my attention!
If you or someone you know in Livermore, California, or Alameda, Contra Costa & Parts of Solano, Napa, San Joaquin, the Greater Bay Area & Other Northern California counties have questions about short sales or need assistance with a short sale on your own property, just let us know. My team would be happy to assist you directly if we serve your area or refer you to a great person in your area if we cannot assist you directly. We do process short sales for a select few agents who meet our criteria, so if you are an agent who needs someone to process your short sale listing, contact us to see if you may qualify.