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Short Sales (To participate or not-that is the question)

By
Real Estate Agent with Keller Williams Realty REB.0755718

The latest trend in the Real Estate market is something called short sales.  Basically, The seller owes more to the bank than they can sell for on the open market.  Realtors bring a buyer, reach an agreed price with the seller and then the negotiation with the sellers bank takes place.  If no contact has been made with the bank you can expect two to three months before the closing for one lender and even more if there is a second mortgage holder.  However, if the Seller's agent has some short sale experience, he/she will suggest that the seller contact their bank or banks to start the process long before a buyer is found.  This can save weeks off the short sale process.

My experience is that it takes a very patient buyer (sometimes with blinders on) to ignore all the other homes that come on the market while they are waiting for this short sale process.  I have seen, time after time, that they become impatient and rescind their offer and end up purchasing something else.  Unless the property is such a bargain that they don't mind waiting, they will move on to something else.  In addition, if the sale price is too low then there is a good chance that it will not even be approved by the bank anyway.

A foreclosed property seems to be more of a standard real estate transaction.  There is an asking price, a buyer and seller, an accepted offer, inspections and a closing date.  I have been involved with lots of these and they have gone through with nary a hitch.

The question that I have, as a Realtor is "Are short sales really a benefit to my buyers?"  As the market becomes more and more saturated with these short sales it has become a necessity to include them as part of the buyer's search process.  I just read today that less than 10% of these short sales actually close.  If that is true the question for the buyer and or the Realtor is "Should I participate or not?" 

My opinion is that a few things have to happen in order to get involved in a short sale.  First, has the seller been in contact with their bank/banks and provided them with the initial paperwork?  Second, is the seller's agent willing to be in constant contact with the bank/banks to make sure the process moves along?  Third, is the price so good that it makes sense for the buyer to wait and forego other properties?  Finally, is the price so low that there is little chance that the bank will agree to the offer anyway?

 

Posted by

Marvin BeninsonOur Clermont, FL.Greater Orlando team is called The House To Home Realty Group.  Our office is located in Clermont, FL. 34711 and we cover The Greater Orlando/Clermont areas.  Visit us at HomesinGreaterOrlando

My team, The Beninson Associates covers the Western Ct area.  Our office is in Ridgefield and we cover Bethel, Brookfield, Danbury, New Fairfield, Newtown,Redding, Ridgefield and Western Ct generally.  Visit us at http://www.homes4saleindanbury.com  to Search for Homes 

Call me for any questions on Short Sales and Foreclosures or Real estate in general in Ct or around the world 352 404-6722 or 203 733-0147.  We also specialize in 55+ communities in FL. and CT.

 

 

Comments (5)

Matthew Zgonc
Aksland Real Estate - Modesto, CA
Realtor, CFS, CVS

The reaon only 10% close is that the buyer usually gets fed up and leaves prior to the closing, or finds another property. I have a high success rate with active short sales, but it does take a while.

Jun 17, 2008 04:13 AM
Michael Wayne Jackson
Coldwell Banker - Novato, CA
Broker - Seniors Real Estate Specialist Novato

We should all include short sales as an option for our buyers. We just need to educate them on what stages the short sale is in and not to depend too much on that specific offer going through.

Jun 17, 2008 05:55 AM
Anonymous
marvin Beninson

Matthew,

 

What do you attribute to your high success rate?  Is it repitiion, have you taken that two day course that is offerred in Ca., or you just have a good system down?

Jun 17, 2008 07:12 AM
#3
Michael Stephan
VISION MORTGAGE LLC - Westport, CT

Marvin -

As you know the bank will take nothing less than the mortgage balance - or pay off - which usually ends up being more than the mortgage balance as it appears on a credit report.

The question: Is it in your Client's best interest to accept a short sale requires "cryistal ball logic" - if we knew that we wouldn't be here.

With Relo companies buyer out home and marking down the price buy as much as $50,000 immediately after the owner is transferred out of the area doesn't bode well for keeping your house on the matter as the alternative.

Remember the old Yankee philosophy: "Never buy when you have to but. Never sell when you have to sell.

Cheers!

Michael Stephan

Wilton, CT

(203) 762-5688

http://www.settlersmortgage.com

 

Aug 29, 2008 12:03 PM
Michael Stephan
VISION MORTGAGE LLC - Westport, CT

Jeez - sorry for all the typos. I DID use spellcheck!

Aug 29, 2008 12:06 PM