Want to Buy a Short Sale - Bucket Your Seat Belt, This May Take a While

By
Real Estate Agent with M Realty

With the extensive media coverage, I'm surprised that I'm having an issue with the level of patience I'm experiencing on my Mission Viejo Short Sale.  Both the agent and the buyers are disappointed that I can't give them a firm response time - really?!  Come now.

I listed the property and within 4 days, I had 4 offers.  I promptly put it in back up (I hate listings that sit collecting offers and still show 'Active' but that's another conversation).  We submitted with the bank.   

It's been 6 weeks - the appraisal was just completed.  It's likely another 30 days before we hear something.  Sometimes they go faster - sometimes they don't.  Sometimes they never close.

For example, over the weekend I pulled Short Sale history in Ladera Ranch.  Currently there are 40 Active Short Sale listings under $450k in Ladera Ranch.  There have only been 11 successfully closed Short Sale listings under $450k (based on MLS reporting) in Ladera Ranch, EVER !  And we've been in this market for at least a year and a half!

I understand the desire for an answer.  I understand the frustration of waiting and not knowing.  Unfortunately, if you are going to write an offer on a short sale, it's a long process in which the listing agent has limited control.  We're going through all the right steps of the process...but it is slow!

So if you are considering a Short Sale listing, be prepared for a lot of unknowns over the next 30 to 90 days.  Know that the agents have little ability to change that. 

If you are an agent - educate your buyers or help them find better solutions for their search for a home.

Stepping off my soapbox....

 

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Rainmaker
706,335
Bill C. Merrell
Merrell Institute ~ Appraisal Education Network - Bohemia, NY
Ph.D. - Merrell Institue

BEEN INVOLVED IN SEVERAL- 1 HAS STILL NOT CLOSED- 8 MONTHS HAVE GONE BY

THE OTHER THEY DEMANDED WE CLOSE WITHIN 4 WEEKS OR THE DEAL WAS OFF THE TABLE- WE CLOSED-

WHO KNEW?

HAVE A GREAT DAY AND KEE ON BLOGGING

BILL

Jul 15, 2008 04:20 PM #1
Rainmaker
251,251
Joel Weihe
Realty World Alliance - Wichita, KS
Helping you to use your VA home loan benefits

Here Here.  They really should be called the Long Drawn Out Sales.

Jul 15, 2008 04:21 PM #2
Rainmaker
409,251
Karen Monsour
Coldwell Banker Fort Lauderdale Beach - Fort Lauderdale, FL
REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!

Tell me about it...I have one going on since last October....it's rediculous.

Jul 15, 2008 04:27 PM #3
Rainmaker
219,898
William Collins
ERA Queen City Realty - Scotch Plains, NJ
Property and Asset Management

Linsey,

Thanks for the post. Apparently, a number of agents and buyers still lack the knowledge necessary to seeing a short sale to fruition. Having said that, I still don't understand why the lenders haven't geared up for the bust (hire the staff or outsource). In most cases by the time you get the approval, the property has lost another 2-3% in value because of the declining values.

Jul 15, 2008 04:36 PM #4
Rainmaker
46,073
Laura Forty-Garcia
RE/MAX CENTRAL REALTY - GRI, CDPE, SFR, CREO - Lake Mary, FL
Your Central Florida Connection to Real Estate

It is a Pain in the you know what_____.

Stress and more stress, but many at our office are closing them.  So persistance pays off...

Jul 15, 2008 04:44 PM #5
Ambassador
1,725,150
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

It is so long, that you can easily have a buyer who loses interest and withdraws right when you are about to get the approval. Then, like we had jsut a few days ago, the mortgage broker got a call from the lender that they terminated the program and we got the approval on a short sale by the lender the very same day.

ANd they only gave us 2.5 weeks to close.

 

Jul 15, 2008 04:50 PM #6
Rainer
44,342
Linsey Ehle
M Realty - Rancho Santa Margarita, CA

Karen, Bill and Sheree - Hate to admit it, but misery loves company.

William - please - this is another post!  Why can't the seller apply first for a hardship, have the bank set the price, then have the agent list the home?  Instead it's Backasswards, as my dad loves to say.  Forgive me...but honestly, banks would ultimately profit from a strategy that was a bit more proactive. 

Let the seller apply for the short sale and hardship FIRST!   There would be no more low ball listings just to generate offers to see if you can prove the hardship in the firstplace.  Sellers, buyers, banks, agents, and the strength of the overall market, would be served by that kind of strategy.

oops....I think I'm back on that damn soapbox again.....

 

 

Jul 15, 2008 04:55 PM #7
Rainer
50,733
Greg Knowles Santa Barbara Ca.
Fidelity National Title Group-Santa Barbara - Santa Barbara, CA

On the escrow side we are seeing the same thing. The other piece that is interesting to me is that many sellers think the bank is going to let them do a short sale when in fact the seller has other assets and would never qualify. I think they are here to stay for a while though.

Jul 16, 2008 11:48 AM #8
Anonymous
MCO

Can a family memebr (Father) buy my short sale house???

Sep 17, 2008 05:08 AM #9
Rainer
44,342
Linsey Ehle
M Realty - Rancho Santa Margarita, CA

MCO,

Potentially, yes they could buy your short sale if you in fact qualify for a hardship (Divorce, illness, job loss).  You would still need your father to submit an offer, submit your hardship package, and go through the bank  to get approval.  You still would have the short sale on your credit. 

You might talk with a short sale negotiator to help you with the process.  Be careful in this area because there are unfortunately, a lot of unscrupulous folks taking advantage of short sale sellers right now.

Call me if you need some help and I can point you in the right direction.

Sep 17, 2008 07:01 AM #10
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Rainer
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Linsey Ehle

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