Saturday, 16 May 2009

Short Sale is Getting Easier.

As I posted about tax and debt ramification on Short Sales in previous posting, lenders are more and more willing to getting Short Sales transaction completed before getting into foreclosure.

Up until last year, I did not prefer to be involved in short sale transaction because it takes too long time and you never know what happen until last minutes. Lendrs (or mortgage servicers) are much more motivated right now because:

1) When lender foreclose properties, it cost approx. 20-30% on property value due to legal, acquisition, holding and sales cost.

2) Lender do not want to increase foreclosed property holding (non-performing asset) as it looks really bad in balance sheet.

Therefore I have been dealing with 3 short sale transaction always (I only work on short sale transaction when I can work directly with seller and get cooperation from lenders).

Anyway -- I think it is generally good that short sale is getting easier as bank foreclosure create unnecessary vacancy and deterioration of properties. To foster this trend, Federal Government is assisting lenders (servicers) and borrowers by streamlining short sale procedure.

It looks like Government offer $1000 - $1500 to lenders and borrowers on successful short sale transactions. Nowadays, approx. 15 - 20% residential real estate transaction is short sales. I certainly see increase in short sales transactions for next 1-2 years.

This is great opportunity and happy investing!!!

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