Thanks to Melissa Zavala this morning, she gave me inspiration for this blog. I woke up late, thinking about what I will say tomorrow when I tape a TV show. It's a community outreach program on cable. The producer wants me to talk about short sales. I told him I will lay it on the line. I might say things that go against the norm. There is no sugar coating from me. I'm very opinionated. I'd also like to believe I am informed, especially since I closed almost 100 deals last year.
As a Sacramento short sale agent, I see people make mistakes over and over. Such as loan modifications. With very few exceptions, a loan modification is just about the dumbest idea ever. It makes little sense. It prevents homeowners from looking beyond the end of their nose. They get a lower payment, in most cases (sometimes it is higher), but they still owe all of that money!
In a short sale, they could sell and buy another home in 2 years at half the mortgage. An identical home. Half the mortgage. Because the market is not going up, and I don't care what you read. The market is depressed, it's declining, and it's only gonna get worse.
People think the problem with short sales is the bank. Banks are slower to approve a short sale than you might like, but the fact is they approve short sales. Average short sale approval time is 2 to 4 months, providing a complete package is submitted to the lender upon inception. It's not the banks who cause all the delays.
It's the buyers.
It's the buyers who continue to look at other homes while under contract to buy a short sale.
It's the buyers who change their financial situation while under contract to buy a short sale.
It's the buyers who quite possibly were not fully qualified in the first place to buy a short sale or any property.
It's the buyers who refuse to understand that a short sale is sold AS IS with no repairs.
It's the buyers who think they can renegotiate with a short sale bank after short sale approval.
They cancel. The home changes status from active short contingent to back on the market. Other buyers then stigmatize the home and believe something is wrong with it because it's now been on the market for so long.
So, if buyer's agents hear that I am tough on buyers -- they would be right. I want buyers to put their earnest money deposit into escrow. My Sacramento short sellers want that buyer's agent to promise in writing they won't go around us. We want the buyer committed. Because we are in the business of closing short sales, not changing status in MLS from active short contingent back to active short sale. The latter is not productive for anybody.
Comments(5)