Do you REALLY want to make an offer on a 'short sale' ??

National Association of Realtors (NAR)  has just confirmed that short sales are still anything but 'short', stating an average time frame for a short sale taking 16.6 weeks!  This fact on top of the startling statistic that less than 3 of 5 short sale transactions are ever coming to completion makes it crystal clear why most buyers and buyer agents steer clear of short sales.

Another thing that buyers need to take into account when making an offer on a short sale is that a large percentage of sellers do not cooperate and have an attitude in which they think they've lost everything anyway and why should they care?? Many times the seller won't provide documentation that the lender wants in a 'timely manner' thus stalling the short sale process, and then there is also the possibility that the seller decides to work on a last ditch effort to get a few more free months in their house by filing bankruptcy. When the seller files a BK, the entire short sale is void and all the work and wait is for nothing.

I currently have a short sale that was approved by the lender and upon walking my buyer back through after receiving the approval letter we discovered a few disturbing things. The seller had starting removing items that he apparently felt were his to take. The entire designer custom fireplace mantle and surround were ripped from the wall, the vanities were removed from the bathrooms and the water lines capped, and the surround speakers were removed from each room and plastic wrap taped over the gapping holes in the ceilings. The pool that was so beautifully maintained a month ago now looks like a green swamp- Never mind the fact that before we viewed the property in the first place the seller had already removed the entire kitchen!

So, now what do you do? The listing agent was informed and she called the seller to tell them to stop trashing the house and removing items that are not theirs to take, but they told her that they will not return the missing items. Never mind the fact that my buyer LOVED the fireplace, that now isn't so pretty, and the pool will take time and money to clean up, the holes in the ceilings will have to be repaired and new vanities will need to be purchased and installed.

So now as a buyer representive I realize that I must include another item in with an offer on a short sale. An addendum that explains that the buyer expects the house to be in the same condition as when the offer was made and that photos have been taken and that 'built-in' items will NOT be removed by the seller because they are considered part of the property. All this because you can't expect that the listing agent informed the seller of what their duties are as a cooperating seller in a short sale.

So my advice to buyers will still be to steer away from short sales unless you have the patience of Job, and are prepared to have the deal fall apart after 4 or more months of waiting, or prepared to find a shell of the house you thought you had made an offer on.  The possibility of getting a 'good deal' on a distress sale, short sale, just may not be worth it to many buyers.

Deb Espinoza  GRI, REALTOR, ePro, SFR, CNE

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