How the Northern Virginia Short Sale Market Has Changed from 2007-2013
It's hard to believe that when agents in Northern Virginia started seeing Short Sales crop up in the MLS in 2007 that they thought they would be a short lived phenomenon. It's been six years of Short Sales with no end in sight since they started to appear in our market. And while they have decreased in overall market presence since 2007 to 2013, some other things have changed as well.
For starters, as a Short Sale Agent, I am here to tell you that banks are much easier to deal with than they were in 2007-2009. Banks have beefed up their personnel and most, though not all, have streamlined their procedures for processing a Short Sale contract package for review. It's still a tedious process in the fact that Sellers have to provide buckets of personal and financial information to the bank, but it's a lot less timely for the bank to review the contracts.
As the real estate market was depressed and overloaded with inventory at the outset of Short Sales in 2007, and for a few years after, the impression the general public had was that Short Sales and Foreclosures were killing market value. It was market demand that was killing market value. Too many homes listed and not enough buyers equals falling values. So it felt like buyers were getting monster deals below market value because the banks were trying to unload their inventory. Yes and no. Market value BECAME what those buyers paid and it continued to fall until values started to stabilize in 2010. And when it came to facing the harsh reality of falling market values, banks were much quicker to deal with it than home owners struggling to get every penny from their home. The banks had no emotional attachment and were quick to lower prices and be among the first sold.
The last couple years have seen increased buyer demand and rising prices. And Short Sale Banks are not letting that market pass them by. While there are fewer properties to meet buyer demand, we often see Short Sale Banks countering low list prices from agents not well versed in exactly HOW a Short Sale Bank deems whether an offer is solid or not. They have, and always will, look to their BPO or appraisal that shows current market value. Not value of just Short Sales and Foreclosures, but the homes most like the one they have a contract to sell, be they regular sales or not. And since market values are rising, so are the prices of Short Sales.
So if you see a deal on a Short Sale listing that seems to good to be true when compared with recent sales, it probably is. The chances the bank will counter an unrealistically low list price that was chosen by the Seller and Listing Agent are high. Just like any other sale, Short Sale Banks are not likely to leave any money on the table.