It’s one of my favorite movies and one of the best movie lines ever written. It comes from “A League of Their Own” and casts the oh-so-magnificent Tom Hanks as Jimmy Dugan, a washed-up baseball coach made to lead an all women’s baseball team during WWII. If you don’t know the line and the movie, you’ve missed something important. Really.
Short-sales are the ever-popular bargain-aisle specials of real estate. And who doesn’t love a bargain? The seller is upside-down and needs/wants/decides to move on. Likely he or she has already “notified” their lender of their need for special assistance by making a late payment… or two… or three. And, the lender, ever-eager to avoid the legal morass and expenses of a foreclosure (they take, on average, over 600-days in CT) and, thus, the more orderly process of a short-sale should seem the more attractive fork in the road.
Except that it ain’t necessarily so.
For a whole host of reasons, starting with the fiduciary duty that the servicer has to the investors in the mortgage pool that owns the seller’s mortgage, the process is tedious, rule-bound, and as transparent as concrete. And, as a buyer, you get not one shred of information about the seller’s lender’s review of your offer. It’s always a shock when, 3 or 4 months after you’ve submitted a contract to the lender, the bank comes back and says “No,” or, worse yet, forecloses on the property without alerting you beforehand.
Not all that long ago, I worked with a young couple who were relocating from New York to Eastern CT. They found the perfect home – a short-sale – and negotiated their deal with the seller. Confident that all was going to move along briskly, they sold their home, moved with their 3 small children to her parents’ home, and then sat for 9 long months while the short-sale approval ground along.
When closing day finally arrived, the realtor told me that it was very touching when the father started crying. I said “Those were tears of joy, Tammy” and once we’d both stopped chuckling, we both agreed that short-sales are neither short nor are they meant for the faint of heart.