Guidance for The Movement in the Real Estate Market

Not all banks treat their clients equally!

Yesterday we closed a short sale listing that took 8 months to sell. Although I am thankful for being able to finally close escrow and help our clients move on to a new chapter in their lives, I wanted to mention some of the problems with this particular short sale process.

Many loan servicers now utilize online home auctions as a mandatory step in the short sale listing. The auction process can be very lengthy and adds more third party red tape to the transaction. Furthermore, once there is a winning bidder, the value still has to be approved by the investor. In the mentioned transaction, the property went through auction bidding three times before the bank finally approved the contract that would be allowed to close.

This process could have been expedited if the negotiator were allowed to release the minimum net proceeds that the bank was looking for to approve the winning bid. Another detail that was not mentioned was that the bank would not allow a relocation incentive if the property was in a trust. This detail was never stipulated until the final offer was approved, less than 3 weeks before we were scheduled to close escrow.

Over the past few years, we have worked with other banks that not only gave the relocation incentive, but also paid the sellers up to $30,000. That happened two times during the past few years and both of those times the servicing bank was JP Morgan Chase. We seem to always focus on reporting the negatives, but in this case, I also want to point at a bank that did go above and beyond to help their borrower better work through their transition of losing their property.

Lastly, I am reminded of how fortunate we are that the short sale market is no longer the majority of the supply in the market. Short sales are more difficult, more emotional for the clients, and sometimes unfair because you have to deal with bank that only views borrowers as a number, and their goal is to only protect their bottom line rather than assisting borrowers through a sad and tough situation of losing their home.

 

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