Short Sales, You Must Be Patient

Are short sales hopeless? I wouldn't say hopeless rather enduring. You have to be willing to play the banks game and be patient. The bank knows when a property has interest in it this will usually spark other interest. So part of the wait is to see if they can get more money. If you are the seller make sure your agent is still marketing your home and properly shopping offers. Your home is not “sale pending” until the bank approves the price. Also your bank wants your real estate agent to divulge offer prices to get more money. There are also other factors, banks are backed up (however its getting better and there are new things coming down to help), and do you have a second? Is the second with the same bank, if so they can foreclose, that second note goes away and they can maybe make a profit. You think well why would they risk loosing money? Well one reason could be there are write offs another could be bailout money or as mentioned maybe they can make more if there is a large second. One other big factor is they are not tied to a home like a home owner, it’s just numbers not their home. If you are the buyer, be patient but don't get too tied to a property just encase you do not get it either while waiting or if you are out bid.

All in all most buyers are not patient enough to wait 6 months (sometimes up to a year or more) for a response and if the agent is doing it correctly buyers can be knocked out of first position while waiting. Most sellers are in short sale for a reason, so they can't always hang on long enough. I would say 1 out of 10 short sales (in Flagstaff, AZ) actually closed last year, just a guess as the actually data is hard to track and will be easier in the new year.

Some banks are getting the hint; let’s approve a purchase price first. Makes sense right? If we have approval we can secure a buyer and close the homes. MOST banks at this point won’t talk to you unless: A) You are behind in payments, You have your home on the market, AND C) You have an offer. For example what happens now that there are 2 foreclosures in your neighborhood that have sold $200,000 under what you owe, 1 regular sale at $150,000 under and all the competition is $150,000 to $200,000 under? This is why it's nice to have a bank approval before hand, otherwise we may get 6 months into it and they say no. There is some good news though, it's getting better and I hear things are changing and our industry is catching up.

Best of luck to all buying or selling a short sale!

Johnathan

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