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Banks Offer More Cash Incentives for Short Sales

 

More banks are offering home owners incentives to sell their houses in a short sale to prevent a costly foreclosure to the bank. In fact, some banks are offering struggling home owners as much as $35,000 to do a short sale, according to an article at CNNMoney.

Many home owners have been surprised at banks’ recent willingness to approve short sales.

"Initially, the home owners are skeptical," says Elizabeth Weintraub, a real estate professional in Sacramento, Calif. "The bank may have already turned down their request for a modification. Then, one day, they call and say, 'Let us give you some cash.'"

For banks, the incentives have proven to be a smarter move than letting a property fall into foreclosure.

"The first choice is a modification, but if that's impossible then a short sale is a faster, more efficient solution," Tom Kelly, a spokesman for Chase Mortgage, said. 

With a foreclosure, home owners stop making their mortgage payments and usually property taxes as well. They also often put off maintenance issues, which can cause the home to lose value even more. Foreclosed homes sold, on average, for 22 percent less than homes not in foreclosure in December, according to National Association of REALTORS®’ data. For comparison, discounts for short sales were about 14 percent.

"I've seen a lot of foreclosures for sale where it would cost a lot more than $20,000 to get them into condition to sell again," says John Hayton, a short sale specialist in Orlando, Fla.

 

 

 

 

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Comment by Barbara Amstadter on February 19, 2012 at 6:24pm
I have done several deals with Ocwen. They come off tough, but are actually reasonable. I have gotten full commissions and foreclosure sale date extensions. Just stay strong with them. Provide them with good and valid info and keep pressing. You will do just fine!
Comment by Janet L Bour on February 18, 2012 at 8:14pm

Anyone out there working with Owen?  Any words to help?  There short Sale number goings to India!

That wrong!

Comment by Barbara Amstadter on February 14, 2012 at 9:55pm

Linda,

I, too, am a CDPE. Obviously space didn't permit alot more dialogue, but I have a few great names within the banks I have obtained over time and they have been invaluable to me. Where are you located. I am in Newport Beach, CA. 

Comment by Linda Greenwell on February 14, 2012 at 8:55pm
Barbara,

I have paid dearly, cash and time,to be a CDPE educated agent and have. been experienced in short sales for several years. I do prefer Equator, but have had issues with it, even when tasks are completed and submitted in the frame allowed. Sometimes it is not the Realtor, but indeed the lender!
Comment by Barbara Amstadter on February 14, 2012 at 8:27pm

Rosemary, If you are experiencing short sales in your area taking 4-6 months it tells me the agents may not have had adequate training and/or experience in the short sale world. Agents who put properties on the market at super low prices are not doing any of us a favor. Short sales do NOT take forever to be approved. With the newer Equator platform and the continued streamlining of the process, the only reason they take a long time is either because they are not being followed up on a  near daily basis, the agent is submitting an  incomplete package and possibly not being responsive in a timely fashion to document requests or has so under-priced the property, the bank's appraisal comes in much higher and value can't be reconciled. It would be great, if more agents would take the time to get educated. I know most of them mean well, but for me, that doesn't cut it when your client's whole world depends on your skill set in helping them through the foreclosure process.  Happy Valentine's day!!

Comment by Rosemary Loven on February 14, 2012 at 3:19pm

I don't agree with this article.  As an REO broker, I find that short sales actually drag down the price of houses on the market, due to the common practice of short sale agents to frequently reduce the price of the short sale listings until they get an offer.  Short sales take forever to be approved, often as much as 4-6 months, so how does that shorten the process?  Moreover, one of my current REOs sold for $20,000 more than the short sale listing price for that same house that had to be withdrawn due to the foreclosure.  Perhaps you were referring to cash for keys for Deeds in Lieu.

Comment by Barbara Amstadter on February 14, 2012 at 1:17pm

Just have had all of our Chase files moved from South Carolina to Texas and re-assigned to new negotiators who know nothing about them. This is so frustrating, as we try to keep managing buyers' expectations and then they throw us a curve ball that we can't even hit. So, it is back to square one. We are being told our files are "priority" files.  We shall see.

Comment by Linda Greenwell on February 14, 2012 at 12:04pm

I would just like the banks to approve the shortsale in a timely manner.  I had a buyer walk after waiting over five months to just hear ANYTHING from Chase.  AFTER he moved on to another (not short sale) home, they wanted to close....too late.  We have been working on this since June 21, 2011 and after many escalation requests, are hoping to close next month.  I think what little I will get paid constitutes a violation of Federal minimum labor laws...just saying!  However, my seller will walk away with $13,000.  When one considers who is benefiting more from these deals, we can be certain that it isn't us realtors.  What action would the lenders take if Realtors decided they weren't taking the abuse any longer?

Comment by Yolanda Figueroa on February 14, 2012 at 12:03pm

Bank of America offered an incentive of 15K to close on a condo sale of 23K. We used the money to payoff an additional 6K to the 2nd lien holder and 9K to the condo association owed over 16K. If not for this incentive the condo would be a foreclosure.  I can say though I have not come across another incentive this good for my other transactions from Bank of America.

Comment by Stephen Caruthers on February 14, 2012 at 12:03pm

It is a smart for everyone involved in the Short Sale process for Banks to offer Cash for Keys.  And, expedite the process so we can get more done!!

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