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Waterfront, Golf, Historic, New Bern NC has it all! Sonja Babic
Broker/Realtor New Bern NC
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Here you can see all of
the Short Sales currently listed for sale in New Bern NC area. Please email
me if you have additional questions and if you would like to look at any of
What is a short sale?
When the owner of a property owes more on the mortgage than the property is
worth and can't make up the difference, the mortgage holder must agree to
take less than is owed in order for the owner to sell the property. This is
called a short sale. If foreclosure proceedings have already been started
but not yet completed, a short sale can also be a pre-foreclosure. That
means it is not yet owned by the bank, but the foreclosure process has been
Who actually makes the decision to approve a short sale?
Sellers are not allowed to profit in any way from a short sale transaction.
So the seller really don’t care what he/she sells the home for. Surprisingly
enough, the seller's lender, who is probably only servicing the loan,
doesn’t care either. The servicing bank merely collects the appropriate
documents and presents the entire file to the investor who is actually
holding the note and is owed the money. So the investor is the only one who
cares how much the sales price is. And each note has a different investor.
Literally, you could have two identical homes with two identical cash offers
being serviced by the same bank, and yet one will get approved and the other
will not. It is entirely up to the investor holding the note how much, if
any, loss they are willing to take.
Why do short sales normally take such a long time?
Servicing banks (like Bank of America, Wells Fargo, Chase, etc.) make money
by collecting monthly payments on mortgages notes on behalf of the note
investor. As soon as the borrower stops paying on the note, the servicing
bank stops making money. The bank then has little monetary incentive to hire
a large number of employees or install the necessary infrastructure
(computers, faxes, etc.) necessary to complete thousands of complicated
files. Often minimum wage employees will quit in the middle of a file, so
the next person hired has to start all over again. On top of that, once a
file is finally completed, it must be presented to the note holder. If the
note holder is a large institution like a major insurance company, it can
take a long while to sign off on a substantial loss. It can literally take
three to four months to get any sort of an answer back on from the bank on a
Why do most short sales fail?
Most short sales fail simply because of the time it takes to find out from
the bank if they are approved. Even the most serious buyer can become
fidgety after a month or two (or more) of waiting to hear something,
anything. That is why it is crucial for the seller's agent to give weekly
updates to the buyer’s agent, even if there is nothing new to report. Just a
steady stream of communication can keep a deal alive. The second most common
reason short sales fail is the difference in appraisal values between the
short sale bank and the buyer’s lender. Again, a strong listing agent can go
a long way toward documenting reasons for a lower sales price, though again
this is ultimately the decision of the investor and sometimes those
decisions seem to make no sense at all! But it is quite common to see the
same property go into escrow several times before a successful closing.
There is nothing wrong with the property itself, just the process.
That is why it is vital that the seller, the buyer and the agents all remain
calm and be willing to jump through many hoops to a successful close.
Guaranteed, there will be many hoops! :)
But the patient buyer can get a great deal and the seller can walk away with
a clean slate, and that is what makes it all worthwhile for both parties.
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