Recently, this question has come up from Realtors and clients alike. Many Realtors refuse to show "short sale" homes because they can be a huge hassle for the Realtor and extremely discouraging for the home buyer. (I will save my opinions about why they are such a hassle and why the banks are pretty much shooting themselves in the foot when it comes to short sales for another blog.) I have considered making it policy not to show short sales, but decided that my job is to educate my buyers and let them make the decision about whether or not to look at short sales.
For a while now, my responses about short sales (for buyers) where based on generalities...gut feeling based on select and somewhat random experiences and office chatter. I always explain to the clients looking at a short sale..."Don't fall in love with the house...The list price doesn't mean anything...this could take weeks...just to hear a NO...we could get a yes which could later turn into a NO etc..."
I didn't THINK short sales were going for prices that would make my investors happy, but I really didn't have the facts to back up my statements...and in this day and age, that's not good enough!
So here are the facts based on the Southwest Las Vegas Area priced under $300k since 1/1/08. I am continuing to research different areas and different price ranges, and will provide that information as it pertains to my individual clients' needs.
Southwest Las Vegas Area priced under $300k since 1/1/08
430 Bank owned property sales
Median sale price per square foot $119.86
Average sale price per square foot $120.84
Median list price to sale price = 100%
89 Short Sales (only 89 closed!!!)
Median sale price per square foot $129.70
Average sale price per square foot $128.64
Median list price to sale price = 99%
512 NON short sale or foreclosure sales
Median sale price per square foot $131.55
Average sale price per square foot $135.19
Median list price to sale price = 98%
The first big obvious is that only 89 actually closed! That's very small considering there were more short sales listed at any given time compared to bank owned homes.
The next thing I notice is that the short sales are selling for about $8-$10/square foot more than the bank owned. Could this be reflective of the general condition of the home? Maybe, but with only 89 sales, the short sale is looking like a long shot with very little, if any pay-out for the buyer.
My conclusions from this information would be:
1. The biggest bargains appear to be from the bank owned homes.
2. If you're willing to make a reasonable offer on a short sale, it MIGHT pan out, but don't hold your breath.
3. Trust your "gut" - it's usually right!