Friday, March 13, 2009

Commercial Short Sales

The commercial short sale market is dramatically different than the residential short sale market. The commercial market is just starting to have negative issues, about a year after the residential market started to slide. What was normal a year ago in the residential market - banks not willing to negotiate short sales and being quick to foreclose - is the way commercial banks are acting now. They have yet to "get it" and will learn the hard way. I am dealing with a short sale in a commercial warehouse condo right now and the banks involved (a major bank and the Small Business Administration as a second lender) are not willing to consider a short sale until the borrower defaults for a few months. Foolish attitude. The residential lenders realized that this did not make sense about 6 months ago and the transactions started to flow. The commercial lenders will have to go through this learning curve too - hopefully not as long - we shall see...

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