One of the challenges requiring some finesse in a short sale transaction is the process of getting a lender to tip their hand, so to speak, about the the minimum price they'd accept for a short sale.  That, we know, is at least one source of frustration for buyers and agents alike. 

Typically, in order to get the lender to even consider a short sale, the seller/borrower will need to have missed a couple of payments and a purchase offer has to be received and submitted to accompany the package.  Then, it can be several weeks yet before the lender comes back with a "thumbs up" or "thumbs down." 

From the buyer's perspective, it can be frustrating because after all that "time in the game," there's no guarantee that the bank will even approve the offer even if the seller is onboard. 

This is frustrating for the buyer agent, as well, because now he has to contend with a frustrated client.  From the listing agent's perspective, on the other hand, he can at least take some comfort in the knowledge that, either way, he'll have the bank's price and can now "get down to business" and pitch a list price that is "short sale approved."

What I've learned is that skills of finesse are definitely required.  And, despite best intentions, it can still leave frustrated clients in its wake.

That's why I was interested to hear about upcoming policy changes at Fannie Mae and Freddie Mac that could potentially encourage continued efforts ease the short sale process.  A WSJ April 17 article pointed to Fannie and Freddie's plans to introduce policy changes "in the next few months" under which real estate brokers would be given an advance indication of the approximate minimum price that would be acceptable in a short sale.  How cool is that?  Though the details have yet to be seen, that tone is a welcomed one to help manage expectations among parties to a short sale.

Helpful, too, are observations where some lien holders seem to have increasing inclination to begin the short sale process for distressed borrowers even while the borrower is still current on all mortgage payments.  (Typically, lenders won't consider a short sale until the borrower has missed a couple of payments.)

This news, too, is good.  And I interpret as one evidence of the growing realization among lenders that the costs associated with foreclosures may, in fact, be higher than those associated with a short sale.  In fact, this seems corrobarated by analysis from Clayton Holdings, Inc. that suggests average losses of 40% (of the loan amount) are associated with properties going to foreclosure as compared to the 19% average for losses associated with short sales.

With NAR reporting short sales currently accounting for about 18% of home sales, I'm encouraged about any news that will help streamline the short sale process for interested buyers and capable agents.