Changes Coming to Short Property Sales

By November 3, 2013Traditions Property Blog

Short property sales in Jacksonville, or short sales as they are better known, are now a whole lot shorter than they were before. New regulations from Freddie Mac are expediting the short sale process on many homes in Jacksonville. These new stipulations went into effect in the end of 2012 and are helping many people transition faster through the stages of purchasing a short sale.

Short sales are often confused for foreclosures, but the two are very different. During a foreclosure the bank who the home loan or mortgage was granted through retakes ownership of the home due to a failure to pay by the party who previously owned the home. When you purchase a foreclosure in Jacksonville you are not purchasing it from the person who lived there, but instead that person has already been removed from the property in most circumstances and the home is sold by the bank at a reduced cost in an effort to recuperate their costs.

Short Sales v. Foreclosures

Short sales are sold by the person occupying the home at a greatly reduced rate. When a home is sold in a short sale it the costs gained from the sale are put towards what is left to be owed towards the house. The person who owns the home is then able to walk away from the property without owing anything, but also without owning anything.

The short sale and foreclosure process has given many people the opportunity to purchase homes for greatly reduced cost, but it is not an easy process to go through. To purchase a foreclosure or short sale the potential buyer needs to work very closely with the bank—sometimes multiple banks. Ultimately, the process can take a very long time. Sometimes it is months before the property will be closed on.

The Freddie Mac Short Sale

Freddie Mac has now changed the way that some of the short sales will work, ultimately making it possible for potential buyers to purchase a home through a short sale much faster than previously possible.

Here are a few of the new stipulations for Freddie Mac short sales:

  • All bank decisions regarding short sales must be made within 60 days.
  • Acknowledgement of a short sale application must be made within three days of receiving it.
  • Mortgage servicers are given greater authority to grant approval on the short sale process without secondary approval from third parties.

Combined, these several changes will make it possible for the short sale process to move at a much quicker speed, making the thought of purchasing a short sale much faster for many potential home buyers in Jacksonville.