New Rules

As much a pain as short sales have been there’s one thing that’s pretty much been a certainty when you go about trying to buy one. That is that you don’t really have to commit until the bank approves the short sale. You don’t need to make your deposit with a Title company, you don’t need to spend money on inspections since it could take months to get the bank to even look at the file on this type of property. I mean really, why would a buyer spend their money on inspections when the bank could easily reject their offer or not respond in 5 months? Why would you put a 3% deposit into escrow where an underwater seller has to sign a release if you decide you’re sick of waiting for the bank to work this out…if it even is possible? The California Association of Realtors has a nice little disclosure called the “Short Sale Information and Advisory” that says the following:

“Buyers may expend money on inspections, loan applications, escrow fees and other costs that they will not be able to recover from anyone if the lender does not approve the transaction. Buyers may also have difficulty obtaining the return of their deposit in escrow if the seller becomes uncommunicative during the short sale process”.

Well, we’ve now entered the crazy world of 2012 real estate around here. Short sales are getting multiple offers now. I saw one this week where the listing agent has a sheet of rules for the transaction that states the following:

 ”Must have initial deposit up front deposited to escrow upon acceptance of offer by seller”

What? Seems the new rules in 2012 want to eliminate risk for sellers of short sales. A buyer in this case should tie up their deposit for months. It seems crazy, doesn’t it? The real question is, will enough buyers comply so that this becomes the norm?