Frederick County Short Sale Blog | Homes for Sale in Frederick Md

Myth: Short Sales Are Just A Ruse for Defaulting Homeowners to Stay in Their Homes Longer

Yes, I heard this the other day, from a buyer who had heard it from a Realtor. 

First of all, there are laws that dictate the timeline by which banks must proceed when foreclosing on a home.  Each state has its own laws.  In Maryland, the lender must wait 90 days after the homeowner's default before filing the foreclosure action.  The lender must send a notice of Intent to Foreclose to the homeowner 45 days before filing a foreclosure action. 

The prospect of a short sale is something that most lenders would prefer to a foreclosure.  The costs of foreclosure are approximately $60,000 to $100,000, not including the value lost as the home sits empty.  The short sale must take place within the timeline established.  It can be thought of as a 'race to foreclosure' with the hope that the price of the home reaches a point that will attract a buyer in time to 'out-race' the pending foreclosure. 

The truth is, most banks are overwhelmed with distressed properties, ie. foreclosures and short sales, and are not in a hurry these days to foreclose on homeowners and add more REO's to their swelling toxic inventory.  The reason why short sales are taking so long is in part because of the overwhelming number the banks are dealing with.  The other main reason is the lack of training on the part of real estate agents.

As the short sale market continues, agents and banks both are getting more equipped to handle the large supply.  We see hope for the short sale transaction as Congress works on legislation to streamline and systemetize the process. 

Contact us for more information on short sales in Frederick real estate.  Or use our free MLS property search:

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The Highland Group

             
                                 
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