Another month has gone by, and another thousand listings have vanished from our current inventory of homes in the MLS. If we keep this up, inventory WILL be in a shortfall a year from now as previously predicted.
What much of the population doesn't realize yet, is that a good percentage of homes in San Diego County are sold already, but they are sitting in active status because we are waiting for banks to approve a massive amount of short sales and bank owned homes.
Buyers presently shopping for a home understand this is happening; they are still competing for the same homes. Many are losing out on the homes of their dreams, even homes that were never really available to the general market to begin with, because somehow they hit the MLS with those now infamous words, "Offer accepted pending lender approval".
I'm not going to exacerbate how that happens, but just say that it's happening more and more lately.
The worse part is, that a number of "short sale" listing agents are not committing to qualified buyers at all... so why should buyers commit to them?
Here are two examples from both sides that I have seen and heard lately:
In the MLS, an agent inputs these remarks in his short sale listings:
"Once we receive short sale approval, we will send out an email requesting your highest and best offer. The seller will then decide which offer they will accept. No offers will be signed until then."
At least with this listing agent who basically has said he will make no promises, by not accepting any specific offer, most buyers will know not to waste their time with a home like that.
Buyers in general, don't want to compete against each other when there are so many other homes available where sellers have much more integrity and motivation.
From an agent talking about one of his clients:
"I've got over 15 offers out on short sales for him..."
If this is how short sales are being handled lately, than what's going to happen to the rest of the market when all the dust settles...
That "buyer" who has several offers out on short sales will only be able to close escrow on one home. What will happen to the other 14 homes that thought they had a deal?
There has to be more commitment to the process from everyone if we are all going to get through this mess. Buyers, as well as sellers, need to commit themselves to the process or we really will be in for a longer recovery.
I haven't even mentioned the commitment of lenders following through on their part of the process, but while we're at it, they also need to grant the loans they started.
I've also heard from other agents that their buyers are losing their deals because banks are changing the lending criteria halfway through the process.
It's like telling a lion to jump through a hoop, only at the last second you decide to change the size of it, so he can't fit.
There's so many factors in closing escrow on a home now, without all these other things going on. Just identifying some of the problems within the industry is exhausting. Please try to understand if you are buying or selling a home in the current market, please remember the most important thing...
Without commitment from all parties, we won't as an industry, be able to move forward.
If anyone has a suggestion on how they handle short sales either from the buyer's or the seller's side, please feel free to comment.
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