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How Short Sales Affect My "Plain Vanilla" Buyers

By
Real Estate Agent with RE/MAX United Real Estate

Here's a little bit of a confession:  my career path has led me to be mostly (not entirely) a listing agent.  Don't get me wrong.  I'll work with buyers in a heartbeat and I enjoy working with buyers.  It's just that, for whatever reason, I work mostly with sellers.  Here's another part:  I don't really work with short sales and REOs. 

I know. I know.  This niche in the market should be an integral part of my business model with so many short sales and REOs on the market.  It's just that I prefer the "other niche" -- houses being sold by sellers with equity in their home.

This brings me to my current situation.  I'm currently working with a buyer who was referred to me by a wonderful past client. My new buyer client is financially qualified to purchase.  They are looking for houses in a price range slightly less than they're qualified for and in a price range where they will be able to make the mortgage payments over the years.

However........most of the homes in this price range are short sales with a few REOs thrown in for good measure.  My clients, God bless 'em, don't have six months to wonder and worry and wait for banks to respond to an offer on a short sale.  They would like to be in their new home by the end of April.

So it seems that this short sale situation -- where "third parties" take forever to approve the sale -- are really affecting buyers, too.  Not everyone is out there looking for "the deal (read: steal) of the century". They're looking for a home to live in, raise their family, get to know the neighbors, etc.  Just regular folks.

So as they send me MLS #s of homes the see on the 'Net that they like, I comb through them, weeding out the short sales, leaving in the true REOs and setting appointments with the hopes that they don't fall in love with a home that the listing agent "forgot" to mention was a short sale in the MLS description (this actually happened to me yesterday).

Note to banks: if you could work out a process to move these short sales through the pipe you might be pleasantly surprised how quickly your inventory would move.

Note to agents: if you have a "plain vanilla" sale that doesn't need third party approval, say it loud and say it proud.  I'll be sure to bring my financially qualified buyer by to look at your house.

Comments (10)

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

You can't weed out short sales and foreclosures.  If you do, you are left with the few homes on the market where the owners have equity. 

There are some good homes in the foreclosure groups these days.  Homes where the owners took good care and because of circumstances, lost them. 

Short sales are something else.  With no standards, they are not for buyers who have a time limit.

 

Feb 11, 2009 11:24 PM
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

I've had a lot of calls recently from agents who ask me "are you sure this isn't a short sale."  On all my listing but one the answer is YES.  Guess what?  Then they go down the street and make an offer on a short sale or REO because they think they are a better deal.  Go figure.

Feb 11, 2009 11:24 PM
Ken Montville
RE/MAX United Real Estate - College Park, MD
The MD Suburbs of DC

Cindy -- that makes no sense to me.  I understand it happens but it makes no sense.  I would much rather deal with someone who can say yes, no or maybe within days rather than months.

Lenn -- I understand there are very few homes being sold by people with equity in their house.  It's a damn shame.  However, there are some.  My clients tell me they don't want to wait six months to get "third part approval" or whatever.  So unless it's a true REO, "bank owned" or listed by someone I know to be an REO listing agent, it's off the list.

Feb 11, 2009 11:46 PM
Alan Gross
PrimeLending, A PlainsCapital Company, Equal Housing Lender - Bethesda, MD
Loan Consultant

The quicker we get out of this market the better we will be. Bargains, particularly in housing where the costs that may need to be incurred after the purchase, are not always what they seem.

Feb 12, 2009 01:51 AM
Dr. Stacey-Ann Baugh
Century 21 New Millennium - Upper Marlboro, MD
A doctor who makes house calls.

In certain price ranges it is damn near impossible to find non-short sales.  My buyer was hoping to avoid them too because she does not want to wait months to find out whether she's in or not, however, we are not having good luck.  I hope you are able to find a few good listings and get your buyers moved in quickly.  For the life of me I can't figure out why it takes the bank months to decide whether to take the short sale or not - no wonder they are all in financial crisis.

Feb 12, 2009 03:16 AM
Terry Miller
Miller Homes Group - Tyler, TX
Miller Homes Group and Tyler Apartment Locator

Great post. We had 500 listings in our Real Estate division last year and no Short Sales or REO's of any kind. It was great.

Feb 12, 2009 10:00 AM
Ken Montville
RE/MAX United Real Estate - College Park, MD
The MD Suburbs of DC

Alan -- I couldn't have said it beeter myself.

Stacey-Ann -- I hear ya.  It's a damn shame that in our little corner of the earth (Gorgeous Prince George's) there are ~6700 homes that are in some stage of default, short sale or foreclosure.  That''s a lot of houses.

Terry -- That's a great stat!

Feb 12, 2009 11:26 AM
James Downing - Metro DC Houses Team REALTORS®, CRS, GRI, ABR,MRP, MilRes
Real Living | At Home - Washington, DC
When Looking to Buy or Sell - Make the Right Move

Ken - REO's are really not that bad to deal with.  What IS terrible are Short Sales.  Buyer's still don't quite get it - They rarely work out.  Now - I know, I read that this agent sold 10 - that agent sold 20.  There are exceptions.  There are also so many that never come to be.... and the wait... the wait can make the most patient person go nuts!

(I am on starting on month 5 on one deal and month 3 on another).  Oh I love banks!

Feb 13, 2009 12:19 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

I am groowing to hate Short sales... because they do take so long and the banks frequently don't know what they are doing.

Feb 13, 2009 01:08 PM
Robin Rogers
Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX
CRS, TRC, MRP - Real Estate Investment Adviser

Some of my buyer customers wanted to see a short sale listing, but the listing agent put in the confidential remarks a warning that there would be a 6- to 8-week wait for a response from the lender.

Maybe her honesty is not doing the seller any favors by scaring away prospective buyers, but she sure did my buyers a favor.

Cheers,

Robin

Feb 21, 2009 09:58 AM