Short sales allow buyers to purchase houses for less than the property's current outstanding mortgage. These homes are owned by lenders, which can complicate the process, as they look to get every possible cent back in return in order to cover their potential losses. If a deal isn't struck during a short sale, the property becomes foreclosed, making it even cheaper for potential homebuyers, but available to more looking to move.
"Horror stories abound from potential homebuyers and Realtors forced to wait 90 or more days for a response to a purchase offer or being required to fax short-sale applications or other paperwork as many as 50 times," Beth Peerce, president of the California Association of Realtors, told the LA Times.
Peerce further relayed that these delays can then discourage homebuyers from placing a bid. This, in turn, affects the families facing foreclosure, which are the parties the short sales are supposed to help in the first place.
In general, California's real estate market experienced a decline in home sales during April, which could increase the efficiency in some short sales, though, lenders will still seek to get as much in return as possible.
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