RS business reporter David Benda points out that Short Sales are not getting any easier to accomplish in his latest blog post.
Why would an average person care?
I know why short sale listing agents care. But nobody has explained to me the real advantage for a homeowner in doing a short sale, over a deed in lieu, or a foreclosure. I expect that individual circumstances dictate the best path for underwater homeowners who must bail out of a house. But seriously, what’s the clear advantage to a short sale for the homeowner? I’d like to hear a straight answer from a credible attorney.
Certainly, there are economic reasons that a lender might accept a short sale over risking a foreclosure on the asset. But the entire matter is complex, and the possibility of short sale fraud is very real, so it takes time and care to do correctly. If you hear of legislation to “speed up” the short sale process, be sure to read that as “encourage fraud.”
Mostly, the advantage is to short sale real estate agents listing the house. They get paid commission on a short sale. They don’t get paid if it goes into foreclosure. Hence the whining you hear about how long it takes to accomplish a short sale, and how hard they are to get done. Wah. If I wanted to hear real estate agents whine, I could just hang out the office. I don’t care, and neither should you. No doubt your profession has much to whine about as well.
Probably, individual circumstances might dictate that short sales should be an option. But certain real estate agent interest groups make it sound like it should be viable option for nearly anyone, and easier to accomplish, to boot. No mention of the inherent moral hazard is ever heard. No compelling reason is presented that doing a short sale is better for the homeowner than deed in lieu, or foreclosure.
tl;dr Short sales are difficult, say whiner real estate agents. So what?