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Short Sales
The latest trend in the Real Estate market is something called short sales. Basically, The seller owes more to the bank than they can sell for on the open market. Realtors bring a buyer, reach an agreed price with the seller and then the negotiation with the sellers bank takes place. If no contact has been made with the bank you can expect two to three months before the closing for one lender and even more if there is a second mortgage holder. However, if the Seller's agent has some short sale experience, he/she will suggest that the seller contact their bank or banks to start the process long before a buyer is found. This can save weeks off the short sale process.
My experience is that it takes a very patient buyer (sometimes with blinders on) to ignore all the other homes that come on the market while they are waiting for this short sale process. I have seen, time after time, that they become impatient and rescind their offer and end up purchasing something else. Unless the property is such a bargain that they don't mind waiting, they will move on to something else. In addition, if the sale price is too low then there is a good chance that it will not even be approved by the bank anyway.
A foreclosed property seems to be more of a standard real estate transaction. There is an asking price, a buyer and seller, an accepted offer, inspections and a closing date. I have been involved with lots of these and they have gone through with nary a hitch.
The question that I have, as a Realtor is "Are short sales really a benefit to my buyers?" As the market becomes more and more saturated with these short sales it has become a necessity to include them as part of the buyer's search process. I just read today that less than 10% of these short sales actually close. If that is true the question for the buyer and or the Realtor is "Should I participate or not?"
My opinion is that a few things have to happen in order to get involved in a short sale. First, has the seller been in contact with their bank/banks and provided them with the initial paperwork? Second, is the seller's agent willing to be in constant contact with the bank/banks to make sure the process moves along? Third, is the price so good that it makes sense for the buyer to wait and forego other properties? Finally, is the price so low that there is little chance that the bank will agree to the offer anyway? If you'd like more information on the advantages of a short sale vs. a foreclosure please contact MarvinB@KW.com
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