Yesterday, I spoke with with someone who works at a company that specializes in negotiating short-sales - they told me that the time it takes to negotiate a short-sale has increased dramatically over the past 60 days.
The company she works for has about 100 full-time negotiators on staff. All of them have seen their case files go from 30 or 40 to over 100. This is in part to the rise in short-sales, but it's also due to the banks taking longer to process the short-sales on their end. This holds up the entire process and is a vicious cycle. (It's like trying to get your inbox to zero, but receiving new emails faster than you can hit "delete")
In addition, and more importantly, the loss mitigation officers at the banks are getting overwhelmed. In an effort to keep up with the rise in short-sales, many banks, such as Countrywide, are re-hiring people that they previously laid off from other divisions and putting them in loss mitigation (to negotiate short-sales). Not only are these hires new to loss mitigation, they're getting thrown into the job without any real training. That's not a good combination.
The person I spoke with also said they've been seeing this trend - increased short-sales and not enough (good) help - really picking up over the past two months They also said that it's getting worse by the day.
One could argue that this is an isolated incident - it's only this one person, this one company and only Countrywide. But I've seen short-sales taking longer as well and other agents who work with short-sales are seeing it too.
For example, an offer I submitted on behalf of my buyer was accepted by the seller (borrower) mid-February. A negotiator wasn't assigned to the case until just yesterday and the bank told the negotiator to "take a number" and that they "would get to it when they got to it". That translates to "it'll take longer than it usually does". Most likely, that means that it will take well over the 90 day average.
Yes, short-sales can be great deals and, with real estate inventory way down, they may be some of your only choices. Just remember that you must have lots of time on your hands and plenty of patience when dealing with short-sales - especially as of late.
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