Short Sales - A Misnomer AND a Marketing Ploy

Jeff, OK I admit..I do place NOT A SHORT SALE in the marketing remarks of my listings. Why? Because short sales are not getting showings in my market anymore. The REALTORS(R) and consumers have lost interest. They are a thing of the past.

The hot commodities now are banked owned properties. My market is saturated with these. In fact, about 80% of the closings are now REOs. So why deal with a short sale? Wait for the foreclosure and purchase when it's easier for the same or less money.

By the way, the tide shifting from short sales to REOs is a sign of the bottom being near. So it's a good thing.

Oops!! I forgot about the contest. 6 months on a $200,000 offer. The lender rejected it..... and foreclosed on the porperty. 3 months later it was on the market as an REO at.............$139,000, where it still sits. Go figure.

It seems that short sales are short only when it comes time to give notice to close -- then the lender wants the closing yesterday!  It is not for every buyer and seller -- that is for sure.

Jeff, I heard on 22% of short sales even close. Do you know if this is true? We still have so many in Ann Arbor, but they are so frustrating, we have been waiting on one for 3 months. I tear down lake house that if falling apart. The bank wouldn't respond, it went to forclosure, now with a different real estate company. As soon as they get their paper work we will know.

The listing agent had not even seen the house? Ask us what type of condition it was in..............oh brother. We told her it is dangerous and a complete tear down, but our clients mother lives 2 doors down so we have been willing to wait..

Oh yea, we offered 10K over the pay off. Now does this make sense? The original listing agent had to over night the package twice they kept loosing it.

 

The popularity of the short sale is the product of an ingenuine market.
The National Association of Realtors' housing affordability index showed that almost anyone could buy a house somewhere in America between 2002 and 2006, because borrowed money was practically free. It's no wonder that home prices soared. According to the Office of Federal Housing Enterprise Oversight, the national index of home values rose 46.9% in the five years ending Sept. 30, 2007. That's an annualized appreciation rate of 8% -- enough to make us all think owning a home was way better than the stock market or gold. Home investors began to believe that they wouldn't have to work for a living anymore. Buying a home has always been nothing more than a cheap thrill for a few unscrupulous consumers. Sadly, the lenders would pass up good short sale offers and take their chances on the court house steps at the foreclosure proceedings. I witnessed, first hand, representing a motivated seller because of divorce and illness, how slime ball loss mitigation personnel could ruin a family by playing roulette with their home, banking on market reversals. One investor backed out of a short sale, 75 thousand below market, which was accepted by the lender, after the liar had committed to bailing the poor family out. Lot's of stories like these out there today. Thanks, Jeff.

You are so right about this. Why any Buyer would even want to go through the ordeal is beyond me. They believe they will buy for less than market. Certainly they will buy for less than the Sellers did, but the agents seem to be pricing them below market to drive the price as high as they can with competitive bidding. It all takes so much time and most all the participants are disappointed. The Loss Mitigation departments are not adequately staffed , they don't have many decision makers and the whole ordeal ( for me at least) is not worth the effort. REO's  are at least  more straight forward. If the Banks really did want selling short to work, they should be far more communicative about their interest. Weeks, dare I say months can by and no one even knows if the Banks are willing to sell or just plan to foreclose. Some agents seem to handle these better than others.

We are averaging about 5-6 months from contract to close. Most of the time we go through 3-4 buyers, because no matter how many times we tell them, they seem to not hear the 5-6 month timeframe we tell them up front.

In our market which is just beginning to slow, short sales are the only homes getting shown.

Jeff I am working on a loan for a short sale right that has been going on for more than three months.  It is a good thing that it is a CHFA Loan and it has a 120 day rate lock period.  I can't believe these buyers are hanging in there this long.

Jeff, great observation and funny. Wonder what the next trend would be in listing verbish here in san diego!