Short sales still are a major factor in the Reno-Sparks market. As of today there are 817 active shorts sales and 1261 pending short sales (Area 100/All residential types). The active short sales only account for 37.2% of the active listings but 62.2% of the pending sales. In May there were 177 short sales closed which accounted for 28.4% of the closed sales. If you look at the first quarter of 2010 there were 433 short sales closed. This year in the first quarter we closed 486 short sales, roughly a 10% increase. The average time it took to close those short sales is relatively unchanged from 2010 when the average was 205 days to an average of 203 days in 2011.
Many of the banks have continued to work on their short sale process and make improvements to speed the process. Many are also starting to roll out new programs where sellers can get “pre-approved” short sales prior to listing the property so that once the property is listed the timeline is significantly reduced which greatly benefits the buyers. (These are programs in additon to the Government HAFA program.)
We still see obstacles when there are multiple liens, mortgage insurance and bond program loans. It is important to know what type of loan you have and if your lender took out mortgage insurance on your loan. Homeowners also need to know that banks are still looking for you to be in default or in danger of default in the immediate future. There has to be a hardship or reason that you can no longer afford your payments.
There appears to be a trend toward more deficiency waivers from servicers, but in some cases it doesn’t come without a cash contribution or promissory note on the part of the homeowner. Many servicers are looking at the seller’s overall financial picture – credit score, other debts, monthly income, other assets etc. to determine if the seller might be required to contribute.
The key is still to seek the assistance of an experienced short sale listing agent as early in the process as possible. It’s best not to wait until a Notice of Default is filed to consider short sale as an option.