This Is Why Your Neighbor's For Sale Sign Is Falling Over

Neighbors wonder what's going on when For Sale signs stay forever in the yard. What's wrong with that Sacramento short sale? Because of the changing demographics in neighborhoods over the past 5 to 7 years, many neighbors don't know each other anymore. So, they can only speculate what's happening in their community, especially among the short sales and foreclosures.

The truth is there is probably nothing wrong with that short sale house. People might think it's the bank that is being stubborn when it's just as likely to be the buyer who is causing the problem. How do I know this? Because I sell many, many short sales in Sacramento. I track my numbers. We're at the halfway mark for the year. So far, not counting my regular sales, I have closed approximately 56 short sales.

The bigger question is how many times have I sold that short sale? We do everything but nail the buyer to the front door. All buyers put an earnest money deposit into escrow. Agents agree not to write any more offers for those buyers or, for investors, no offers that will interfere with this escrow. No exceptions. Sellers hand-select the buyers we go into escrow with based in part on the buyer's commitment to the transaction. Yet, some buyers still wiggle out of escrow.

There are some solid reasons. For example, the typical time period for short sale approval is about 90 days. A lot can happen in 90 days. Buyers get divorced. Buyers lose their jobs. Buyers even die; yup, had it happen. There are also not-so-solid reasons. Flakiness. Fear. Greediness. Ignorance. Woke up on the wrong side of the bed and stepped into cat puke.

I calculated how many times I have sold each of my 2012 Sacramento short sales so far. The numbers are a bit surprising. At least I can say that over half I sell only once. Here are the stats for this Sacramento short sale agent:

• Original buyer for that short sale: 55%
• Sold that short sale twice: 30%
• Sold that short sale three times: 10%
• Sold that short sale four times or more: 5%

This, my readers, is why those For Sale signs stay up forever. It's the buyers. It's not the bank. And it certainly is not the listing agent's fault. It means that just about 1 out of every 2 buyer's agents are not closing their escrows. Which is why we ask buyers to commit to closing. It's nothing personal. It's just the sensible thing to do. Because there is something wrong with a process that takes 94 sales to generate 56 closings.

Photo: Elizabeth Weintraub 2012