Incentive to Sell Homes in Short Sale

Bank of America has introduced a program in Florida that offers home owners as much as $20,000 to short sale their homes.  The program which was introduced last week through emails to select realtors in Florida is just a trial to gauge interest.  Short sale offers on homes must be submitted by the homeowner to Bank of America before November 30 to be eligible for the program.  This program is very similar to the “cash for keys” programs that many banks already offer to home owners and/or tenants of homes that have been foreclosed.  The main difference is that the bank is trying to be creative and offer that money earlier in the process.  If the program is successful it could be expanded to other states.

It appears that success will be measured by the ability of the program to keep homes out of the foreclosure process and of course, how much money the bank saves.  In Florida the foreclosure process takes 676 days on average.  With attorneys involved and the likelihood of homes being damaged or stripped of appliances and fixtures by jilted homeowners the cost to a bank to get foreclosed homes ready to sell can easily be more than $20,000.  One of my favorite quotes in the original Palm Beach Post blog post comes from Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance, who called the short sale payout a “bribe.”  “You can call it a relocation fee, but it’s basically a bribe to make sure the borrower leaves the house in good condition and in an orderly fashion,” Cecala said.  Whether it is a “bribe” or an “Incentive” this could be welcome news for people in financial trouble with their homes in Florida and hopefully many other states.

 

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About Dan Seim

Dan Seim is the primary contributor to Preferred Residential's blog. He has been writing about real estate issues that affect home owners in Bend and Central Oregon since 2011.