I recently attended a fascinating clinic with Richard Evans, District Manager, Stewart Title, on the subject of short sales. Short sales are becoming more popular with lenders as an alternative to foreclosures. A short sale occurs when the proceeds from the sale of a property are not sufficient to pay the lien holder(s) in full. There are many advantages to the lender when considering a short sale versus a foreclosure:
- Saves most of the costs associated with a foreclosure.
- Removes the property from the lender’s books more quickly.
- Reduces Federal regulatory pressure on the lender.
- It is estimated that a short sale will result in a 25% higher return versus the foreclosure.
Richard heads up Stewart Title’s short sale division in Colorado. He is highly knowledgable about the short sale process and what the major lenders are doing to make it easier on the owner and all parties involved. Historically, the short sale process has been inefficient and unpredictable. Many real estate brokers (such as myself) have avoided short sale properties because you can never be sure if you could get a deal done.
That appears to be changing. According to Richard, lenders are becoming more proactive and are starting to work more closely with clients to make the process more user-friendly. I still have my doubts but anything that can be done to ease the process will be a welcome change.