Related blog post: Short Sales May Actually Get Shorter
A bill backed by Massachusetts Senator Scott Brown aims to shorten the process for short sales—say “short” one more time. In order to make things better for buyers and sellers alike here now to talk it out are Anthony Lamacchia and John McGeough of McGeough Lamacchia Realty. Thanks for being here.
Good morning—not short names!
Not short names, we had to have something that wasn’t short about the short sale! So if you’ve ever seen any of these home shows– which I happen to watch a lot of –and you see people that decide to do a short sale and they know it’s going to take forever, and sometimes they still don’t even get it after the fact, so this [bill] essentially is to shorten the short sale, correct?
That’s correct. I mean it’s on the heels of a bill that didn’t really go anywhere about a year ago, that was trying to shorten the process to 45 days, so we’re excited that Senator Brown and some of his constituents are behind this, I mean it will help if it gets enough media attention and enough traction and eventually passes just highlight the fact that you have to hold banks accountable. You can’t just submit offers and allow people to just to sit back, we need to start putting more focus on the banks this is a good step in that direction.
So what exactly is there’s a penalty I assume, if they don’t do it in a certain amount of days?
That’s what’s kind of interesting about this bill, is what they’re doing is they’re saying is that if it’s not approved or denied by 75 days, $1000 will be paid to the buyer plus reasonable attorney fees so at least it would give buyers some comfort that there is a set time frame and if they didn’t hear anything they could get some money. So we really think it would help the market because short sales are obviously much better for the market than foreclosures.
Yeah I guess tell me about that, why is it better, obviously it’s clear they are better than foreclosures because people don’t have to go into foreclosure, but why is it better for the market in general?
Overall study after study are showing that 24% higher price is given to a short sale than a foreclosure, so overall keep in mind people get to stay in their homes, so the homes don’t get vandalized, [copper] pipes don’t get taken, neighborhood values don’t go down so overall to the market it provides a boost as far as the overall pricing.
So everybody should want this? What’s the down side? Why didn’t that last bill make it if it’s very similar to that?
That’s a good question why the last bill didn’t make it the way Washington acts who knows if this one will pass, what I was going to say was the key with short sales is they’re like any other sale. They’re selling from homeowner to homeowner, with banks, they get in, they foreclose on the home and then they resell it to a buyer, so the property goes from homeowner to bank to homeowner, and that’s what makes the properties worth so much less, while the bank has it they can’t keep up with [the maintenance], they try to winterize it, and do all these things, but it just doesn’t happen, so if there were more short sales, and less foreclosures, like John said, we would see prices stabilize a lot faster maybe even go back up so we really hope that banks see this bill and really start to get their act together.
Good question, anything positive put towards the market is going to help it.
So now if this does happen will it exponentially help the market out or is this a slow and steady recovery?
No, this is slow and steady. We’ve got 3, 4, 5 years ahead of us rates can stay somewhat flat or even slightly go up or even go down which would be even better, we should have some stable recovery in the next couple of years. Shorts will be a good step in that direction.
All right we got to leave it at that McGeough Lamacchia thanks so much for being here.
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