Some of you may remember my post “Your Agent was trying to help you when they said Short Sales Suck!” from May 2008.

Nearly 2 years have passed from that day and in many ways, Short Sales still DO suck, but their time of “sucky-ness” (don’t look that up, NOT a word) may be soon coming to an end.

As we are all so very aware, the Federal Government has decided to stick their fingers in just about everything we do with the exception of which sugar cereal we feed to our children. (that’s probably coming…)

In a rare flash of brilliance, some of their new legislation could actually be the best thing to hit Buyers, Sellers and Real Estate in General in a long time.

The problem with short sales has always been summed up in a few major points:

  • Short Sales take too long (as in 3 to as many as 10 months!)
  • The eventual outcome of the Buyer’s original offer is always unknown (The chances of actually getting the home you offered on was a literal craps shoot)
  • They were a miserable ton of work for every single person involved in the transaction

See, the bank that the Seller is no longer making a mortgage payment to (in most cases) typically hasn’t APPROVED the sale of the home at the list price. So Buyers come along looking at a home listed for $150k that the bank may only let go for $170k. That’s just not right, totally confusing and emotionally painful.

New legislation proposed by the US Treasury would make the following changes to the Short Sale process:

1)      Banks would be FORCED to respond in 10 days or less! (Vs. 30-90 in a typical case)

2)      Sellers – yes, the SELLERS who couldn’t pay their mortgages could possibly get up to $1500 for relocation costs

3)      1st Mortgage Holders could get $1000 per closed short sale

4)      2nd Mortgage Holders (the stickiest short-sale killers in the business) could get $3000 per closed sale

Will this come to pass? I don’t know. You can bet they will be taking money from mine and your pockets to fund the plan though, which is one of the negative side-effects of the plan. Does the “disease merit the treatment?”

Shoot me some feedback.

BUYERS – have you been involved in trying to secure a short sale? What kind of experience was it?

SELLERS – are you in that same position? Honestly, is it a HUGE pain in the neck or what?