Short sales still take too long on average, report says
While short sales are considered a desirable option for moving distressed property out of the market, agents are not so sure, with many short sales taking longer than four months to complete. Short sales are notorious for taking too long and costing too much. Even industry initiatives to shorten the lengthy approval process are largely ineffective. Seventy-one percent of agents surveyed in a new study conducted by data analytics firm Equi-Trax Asset Solutions said it takes four to nine months on average to finish a short sale. About 10% of the transactions take more than 10 months, and 18.3% are finalized within the preferred three-month time frame, the report concluded after surveying 600 real estate agents. “They would like to see the time period reduced so that deals go through faster and are less costly," said Guy Taylor, CEO of EquiTrax, when discussing the frustrations of agents working on short sales. When asked what will solve the time-lag, 57.6% of agents said lenders should take less time in closing the deals, 14% think borrowers need better education on how the process works and 40% believe both of these changes are necessary to cut down on average short-sale times. “One way to speed the process and help all parties involved in these deals is to ensure that valuations are accurate and current,” said Taylor. “If they are not, the willingness to complete these deals will be reduced, and the time they take to complete will increase. That means unnecessary expenses for borrowers and lenders.” Short sales under the Home Affordable Foreclosure Alternatives guidelines report that participating servicers must send an agreement to the current property owner no later than 30 days after the investor's first bid. The Treasury does not report average closing timelines under HAFA. Write to Kerri Panchuk.