Short Sale Fantasy

August 25, 2011


After three years of a real estate price adjustment and short sales being a significant part of the current inventory of homes for sale, one might think that the lending institutions would have set up a system to process them. It is possible that they have, but in spite of government incentives meant to speed up short sale approval, it remains the case that a buyer may have to wait three or more months for an aye or nay from the lender.


I have this fantasy that once an offer is accepted by the owner of a property and necessary documents submitted to the lender(s), the procedure might go as follows:


1) The lender reviews the offer and the financial ability of the prospective purchaser to obtain the required financing.


2) The lender orders an appraisal. (The same as the buyer's lender would do in order to make the loan)


3) If the appraisal comes in within some established percentage of the amount of the offer (possibly 5%), the lender approves the purchase and the transaction opens escrow and proceeds to a timely closing.


Here is some more fantasy:


The government, instead of just giving lenders bail-out monies reimburses them for the loss on the loan.


What a concept. The short sales take place, the upside down homeowners move on and the market stabilizes.


One can dream.