Short Sales Evolution ...

Historically most realtors shy away from short sale transactions.  Although the list price of the home maybe attractive and difficult to pass up, most realtors avoid them if possible because of the uncertainty of success and long time delays.  This may be changing as reported by several news agencies recently.

More lenders are willing to approve short sales transactions because they ultimately save the institutions carrying and marketing costs.  In addition, they turn the asset over in a declining market that may evidence a greater erosion of value (assuming the lender takes over the property in foreclosure).  A few financial institutions are pushing for government intervention in setting forth standards and processing policies.  This may pave the way for a greater number of short sale approvals.  Bank of America for example will accept 5% of the total sale's transaction value if they are in second position; and conversely they will approve the same consideration in cases they are in first position.

This may bode well in the future for helping dilute the effect of a swell of foreclosures hitting the market.  Over time it may reduce the burden that foreclosures have on the local micro markets.  But as with everything in real estate today ... hold on time will tell how this current market cycle ends.