Short Sales Don’t Work — Part 1 of 4

Consider this a rant of sorts but I need to get this off
my chest because I think “the system” is getting worse instead of getting
better.  Let me preface this by
saying that I believe the short-sale process is a legitimate option for honest
people and families who have fallen on financial hard-times or bought more
house than they can truthfully afford. 
For these people, we should do everything possible to get their homes
sold quickly so the investor can minimize losses of a borrower that will never
recover, and so the family can move on with rebuilding their lives without the
overhanging debt.

Over the last 3 years I have witnessed some of the most
interesting abuses of “the system”. 
I go to preview dozens of homes every week to keep on top of the market
and find the best values for our clients. 
While doing this I often find myself disgusted, frustrated, and saddened
by what I see.

Why is it that it seems like every short sale home I go to,
the sellers all have a flat-screen TVs?! 
I don’t even have one, yet everyone who can’t afford to pay their
mortgage all seem to have a new flat-screen HDTV.

Or like the short sale in San Jose where I found the
sellers of this particular house have 2 newer Mercedes Benz cars in the
driveway — they can’t afford to pay their mortgage but they drive over
$100,000 worth of the best in German engineering.

Or like another short seller who contacted me to list
their home.  Even though they owned
their house for decades, they pulled all their equity out a few years back to
buy an investment home in another part of California — they bought the
investment home with all-cash at the time.  Since house values have now dropped, they owe more than their
current home is worth and now they want to do a short-sale.  They will walk away from their debt and
move into their investment home where they will never have a mortgage ever
again!

Or like the short sale in San Jose that has been on the
market since August 2008.  It is
still being negotiated with what I believe is the 3rd buyer over
that period of time.  Wouldn’t it
be nice to live rent-free for 2 years?!

I thought you might find it interesting to hear some of the things I run into day-to-day.  The stories continue in future parts…

-Mark

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