I had the pleasure of representing some awesome, patient buyers who recently closed on a short sale transaction in Utah "only" five months after their original offer was written. I have represented only buyers in short sale transactions, and after many attempts, I can finally say that short sale trasnactions CAN actually close. Having closed only one of 10 short sales transactions, my personal recommendation to buyers looking to purchase a short sale property is to avoid them unless they enjoy waiting for inept, non-responsive mortgage companies to respond (if at all).
Now to the shocking figure in the subject line of this blog entry: As of 2/26/2011, 3427 of the 15,057 homes (22.8%) actively listed on Utah's largest MLS system are short sales. Many buyers and most agents are now well educated on the low odds of getting a short sale transaction over the finish line, so this does not bode well for the housing market, especially the over 3000 Utah homeowners who hope to sell their home as long as lenders continue to drag their feet in responding (if at all) to offers on short sale properties. The odds of a short sale property getting shown to a prospective buyer in the first place is very low, and if the property IS shown AND a buyer likes the property enough to write an offer, the odds are 10% (at best by my estimate) that the buyer will hang in there long enough to wait for a bank negotiator to actually become engaged in the process.
I often wonder why once a bank forecloses on a property and takes over ownership (known as REO, "Real Estate Owned" property) that same lender is suddenly able to respond to an offer within days vs months? Are we as real estate agents and the general public really getting the straight scoop regarding short sales? Does anyone else wonder if there may be an incentive for mortgage companies to drag out short sales, forcing many homeowners into foreclosure? Comments are welcome!