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A quick Short sale explanation

By
Real Estate Agent with Real Estate One 6501304423

Some of the houses you have picked out before were short sales.... which could take up to 4-6 months to complete....or may never be accepted by a bank.  If you don't know what a short sale is:   It is where the seller owes more than they are listing it for.  After they get an offer they take it to the bank and ask the bank to be able to sell it less than what they owe. (every once in a while a lender approves a seller for a short sale in advance of putting it on the market)  BUT THEY DON'T APPROVE WHAT THEY WILL ACCEPT USUALLY UNTIL THEY SEE THE ACTUAL OFFER 

The bank doesn't put much manpower or resources towards short sales.  Sometimes one bank personnel has hundreds of short sales on their desk at any one time.   So communication is usually very poor and sporadic.  Sometimes it can be three weeks to a month before the bank even assigns somebody to look at it.

The quickest I ever got a short sale done from time of writing the offer to closing was 60 days with a local bank.  It is not unusual to take 4 - 5 months.

They say only about 60% of all short sales get done.  It may be a little higher than.  The reason the don't get done is the seller doesn't cooperate or qualify for a short sale,  the bank thinks the property is worth more money than you are offering, the house gets foreclosed on in the process, or you get tired of waiting and not getting an answer from the bank.

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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Good analysis.

However, the closing average in my area for short sales is about 25%.

In some communities, short sales represent 50% or more of all listings.

Jan 25, 2010 09:24 PM
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Short sale listings continue to climb in my area. I agree that these banks are under staffed to properly handle short sales. How will they handle the new 10 day response rule in April?

Jan 25, 2010 09:41 PM
Fernando Herboso - Associate Broker MD, & VA
Maxus Realty Group of Samson Properties - Clarksburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

They seem to be always be running behind.. .as soon as they adjust, it's not enough!

Jan 25, 2010 09:43 PM
Katie McBride
RE/MAX Executive Realty - Hopkinton, MA
The McBride Team

Thanks for the information.  We are always answering questions from buyers about what exactly is a short sale.

Jan 25, 2010 10:20 PM