Home > Blogs > Lise Howe > Howe Real Estate Should Be

Are Short Sales Losing Their Glow?

By Lise Howe

Real Estate Agent with Keller Williams Capital Properties DC AB15253

October 05, 2011 01:18 AM

According to a recent report referenced by CRS, Short Sales Are Losing Favor With First-time Buyers - SLIGHTLY

Short-sale transactions are becoming less popular among first-time homebuyers, according to the latest Campbell/Inside Mortgage Finance Housing Pulse Tracking Survey. 39.7 percent of all short-sale purchases in August were made by first-time homebuyers. In constrast, first time homebuyers purchased 54.1 percent of all short-sales in November 2009, just before the original federal homebuyer tax credit was set to expire. It marks the third straight month that short-sale purchases among first-time buyers declined.

On the other hand, maybe it is not that first tme homebuyers are turning away from short sales but rather that more non-first time homebuyers are getting into the fray.

As everyone knows, short-sale transactions can be problematic for both buyers and sellers, because typical approval times of several months. Still many first-time buyers are willing to tolerate the delays in exchange for getting a lower price on short sales, because they sell for an average of 27 percent less than non-distressed properties. Everyone always looks for a bargain - particularly in this market!

Apparently home buyers frustrated by the approval delays are resorting to placing offers on multiple properties, with the intention of closing on only one of them. This practice can further slow the short-sale approval process at mortgage servicer.

If you want to find a great deal in the DC Metro area, you should give Lise Howe a call. Whether you are looking for a short sale or just a great deal, call Lise at 240-401-5577.

Re-Blog

Comments(14)

Comment

Show All Comments

Sort:

Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Lise: What an interesting question. Ummm... I am not sure I knew that short sales HAD a glow... LOL.

I am sure that part of the drop in percentages is due to the fact that there are more non-short-sale homes on the market than there have been in the recent past two or three years or so.

Oct 05, 2011 01:20 AM

Brian Schulte

Allison James Estates & Homes - Sierra Vista, AZ

SFR, Sierra Vista, AZ

Maybe they are seeing the numbers out there on comparisons.

More than likely, they are just not patient enough. When I show a house for short sale, my clients know that the bank could respond within 3 week to 3 months or even way longer. Fear of the unknown time frame and unknown acceptance could drive most folks away. If I know a house similar for a few dollars more, buyers are more prone to buy that.

Oct 05, 2011 01:24 AM

Phil Leng

Retired - Kirkland, WA

Phil Leng - Retired

Hi Lise,

I just listed an REO yesterday. The neighbor came to talk to me.

We thought you were the new owner! It was sold, did it not close?

No, I told him. The bank foreclosed even though there was a short sale offer in place...

Phil

Oct 05, 2011 01:42 AM

Patricia Kennedy

RLAH@properties - Washington, DC

Home in the Capital

Oh, Lise! I am still a short sale virgin! I've written on a couple of them but never had one ratify - and I was sort of relieved each time. I think that here in DC, we have problems associated with so many of the listing agents being unfamiliar with the process, although I expect that could change over the next couple of years.

Oct 05, 2011 01:58 AM

Yvette Chisholm

Long & Foster Real Estate, Inc. - Rockville, MD

Associate Broker - Rockville, MD 301-758-9500

Short sales have a lot of risk in them and as an attorney, it is good that you can explain that to them. I won't work on a short sale if they haven't consulted an attorney for advice.

Oct 09, 2011 03:07 AM

Rosalie Evans

Meritus Group Real Estate - Sioux Falls, SD

The Evans Group, Sioux Falls, SD Homes For Sale

You have to wonder at what point the lending institutions are going to pull their head out of their rectum and streamline the process so we can get rid of this big glut of distressed properties on the market!! I mean if I had to choose between a equity sale and a short sale I would go with the equity sale every day of the week! Once you figure in defferred maintenance on short sales you eat up alot of that 27% and then how far ahead are you really, and is it really worth it!

Oct 09, 2011 04:23 AM

Eric Michael

Remerica Integrity, Realtors®, Northville, MI - Livonia, MI

Metro Detroit Real Estate Professional 734.564.1519

Lise, 27% below non-distressed properties? Wow! You should be screaming that from the roof tops! We typically have 12-15% savings on short sales here, but even that is a savings worth talking about.

Oct 09, 2011 04:26 AM

Janna Scharf

Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID

Coeur d'Alene Idaho Real Estate Expert

It is astonishing to me how much LESS showing traffic my short sales are getting this year over past years. Seems everyone has clued in that they are so traumatic that they avoid them if at all possible!

Oct 09, 2011 04:36 AM

Patricia Kennedy

RLAH@properties - Washington, DC

Home in the Capital

Hey, Lise! I included this post in Last Week's Favorites . Have a great Sunday!

Oct 09, 2011 05:15 AM

Kim & Kristine Halverson

Sotheby's & Knipe ERA - Bend, OR

Sisters, Realtors

Short sales definately have a stigma. I still think they are worth it.

Oct 09, 2011 07:09 AM

Donne Knudsen

Los Angeles & Ventura Counties in CA - Simi Valley, CA

CalState Realty Services

Lisa - Well, as an MLO who works with a lot of first timers, I can attest that most of my first timers won't even look at a short sale let alone even consider them. It would appear that short sales are not very popular out here either.

Oct 09, 2011 02:48 PM

Cynthia Larsen

Cotati, CA

Independent Broker In Sonoma County, CA

I'm in contract with two short sales right now. The buyer is an investor so we don't mind waiting. I hate to have first time home buyers get caught up in short sales unless they are on a month to month lease and FULLY understand what they are getting into.

Oct 10, 2011 04:59 AM

Linda K. Mayer

License # 01767321 - La Verne, CA

Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST

Lise: I have written up some and actually closed some.... months later. People get discouraged at the time it takes, and I think it's simply crazy. Pretty soon nobody will want to offer on short sales and that will hurt everyone. I can't firgure out why the banks don't do something to turn this around!

Oct 10, 2011 06:28 AM

Jayson Holland

Listings.com - Denver, CO

Jay Holland

Cynthia, great point. A typical owner-occupant buyer most likely has to have that flexibility in the place they are moving from. Month-to-month leases or staying with family in the basement are the best options. A short sale could take 6 months to get approval. OR take 6 months to get rejected. and then what?

Lise, I think unless the banks do something to DRASTICALLY reduce the time-line on short sales, they are going to appeal to less and less buyers until only investors are going to be interested.....and quite frankly there are much better deals in my market for investors buying REOs or HUDs.....we dont even need to look at short sales, they are not the best bargain here. Also, that extended time-line is a deterrent to investors, not just OO buyers.

We all know that short-sales take forever, but does anyone know why?

If we could understand WHY it takes so long, we could probably suggest an easy solution.....does anyone know?

Oct 26, 2011 06:56 AM