As a Realtor in the Bay Area Short Sales and REO's are a major part of the Business, I have developed a system that is working to move my Short Sales through the process alittle quicker. I am in Escrow on 2 now and closed one the other day, believe me you earn your comission.

Sun Jun 1 2008, 10:17

Michael - I see the same thing out here.
Lots of short sales and REOs on the market, and it seems like there's houses being sold left and right.
When you take those properties out of the picture though - and look at the typical resales - you have the same property sitting around that's been here for a while now. You have the majority of people trying to hold on as long as possible - and hope to ride it out, a handful who are just tossing ridiculous numbers out there to see if they can get a bite at '06 prices, and a handful who are genuinely trying to sell thier house - but can't complete with the "deals" in the short sale and foreclosure market.

Tue May 27 2008, 23:41

I have an update on my original post. I ran the sales stats for our County the other day as I've been hearing all sorts of scuttlebutt about how the market is "turning around" and was interviewed by a local radio station. The "Continue to Shows" are bloated and show, on face value, more sales. However, when I ran a search on the 750 sales, 305 where "Short-Sales". Of our 375 "Solds" for the month only 32 where "Short-Sales" Of the "Continue to Shows" 195 where "REO".
The reason sales are up in MY area is simply a "fire-sale" is NOW underway. This also applies to new construction as it does re-sale. The REO's are slashing and burning prices while the new home communities are doing likewise. But more telling is this--our Realtor Marketing Breakfast on Tuesday mornings tours the East side of town one week and the West the next. Historically we've always had more agents and properties participating on the East side but we'd get a good amount for the West. However, for the past 5 months our Westside tour has sometimes amounted to only a page or two at best, maybe 12 properties. 90% of the properties are REO/ShortSales. We have a ton of inventory on the Westside but the REO guys just don't PUT them on tour. When I start to see good old "homeowners (you remember those folks don't you??!!) once again selling homes on the Westside of Santa Rosa I will declare for all to hear--THE MARKET IS NOW MAKING A REBOUND!!
Until then, all stories on sales increasing are simply people selling to survive--before the Iceman Cometh!

Tue May 27 2008, 21:10

Not all should close. Sometimes the lender hangs tough for a deficiency even when the loan is non-recourse. "Approval" isn't always a good thing if the conditions put the borrower in a worse spot.

Tue May 27 2008, 20:40

We just closed a short sale on the listing side. And we have closed a couple on the buying end. Each transaction is unique unto itself. Even when successful the short sales are still frustrating. Unfortunately they're going to be with us for a while so we've got to learn how to deal with them. From what I understand the banks are finally getting with the game and staffing up and acquiescing a bit on price. So hopefully things get better.

Tue May 27 2008, 19:29

Jim - i've done a ton of research on short sales and REO property. The number 1 point that's been beaten into the ground over and over again - is know how to pick the right opportunities. Not all shortsales/REOs are created equally, and not all make great opportunities. If you're able to pick out the ones that are worth chasing, there's obviously some great deals to be made. There's also a lot of headache to be had if you don't.

Tue May 27 2008, 18:16

Noticed HSSD, Mario, Donald, and Leanne have above average 40 to 50% success rates on their short sales. Mike K, Christopher and I report personal success at 25 to 30%

Since the average is about 10% that tells you that HSSD, Mario, Donald, and Leanne are 4 to 5 times more successful.

I posit possible explanations for the above average success rates of the question respondents:.

1. Experienced, tenacious, knowledgeable Reactors able to make lemonade out of lemons
2. They may be shying away from some bad listing opportunities that have little or no chance of success

Tue May 27 2008, 17:59

We have a better than 50% ratio

Tue May 27 2008, 17:39

I average about 40% of the short sales I handle going through to COE. Un like the 90's there are a ton more of them. This time around I did my first short sale in 2006, it was pretty easy then, we closed it in under 60 days. NOw Im lucky if I get a response within 60 days! With what is happening right now Im steering away from them when ever possible, but I can also see that for the next 6 to 8 months they are really going to be a big part of my biz like it or not!! Short sales are not for beginners or the faint at heart, there is so much paper work involved, constant calling to the lenders and a ton of hand holding with the buyers. I am a listing agent so Im always holding the buyers agents hands.. also I put right in the MLS in agent comments to allow 60+ days for bank to respond for apporval. this really helps cut down on expectations by the buyer and buyers agent.
good luck out there!!
Leanne

Mon Mar 31 2008, 07:08

I have more info on short sales if you need it. Good luck. www.ishortsales.com

Fri Mar 7 2008, 04:56

Superb article Don! : http://www.realhomes.us/shortsale.htm

I deposited my short commission check yesterday. - That is the positive side of the story. The negative is that it was ten times the headache of an average transaction. The other headache is that my commission was guillotined ( shaved is too soft a word for what they did to me )

One irony of the commission takeaway is that had the principals left my commission intact, and closed six months ago, they would have netted more to the creditors, and the buyer would have collected months of additional rent from the tenants.

The goal and result of cutting the brokers commission, was purely to punish the brokers for procuring a buyer. As long as creditor negotiators remain hostile to buyers and agents, I will continue to advise people that buying a short sale should be a buyers last resort.

The disincentives to both buyers and agents far out weighs the 2 to 3% discount from market value that can be squeezed out of a short sale. Although the addenda from asset managers on Bank owned REO's are also hostile to consumers, they are usually not as terrible as short sales, and the discount from market value can also be as high as 2 to 3%.

Thu Mar 6 2008, 09:57

Don, the link you posted was REALLY helpful - thank you.

Wed Mar 5 2008, 22:28

Opening Pandora's Box. :)

You are the short sale guru ... but I see a lot of other people now specializing in Short Sales, like in my area we have The Short Sale Company who I just had a cross transaction with that closed. Its a tough game for many, no doubt.

Many agents and brokers just shy away totally. It can be one of the MOST frustrating transactions to ever deal with, and up to 5 months to close whereas the normal transaction averages 4-6 weeks. Crazy.

I will take them all on. We close maybe 50% it seems to me, it would be a lot more but you cannot always control your own clients and the Lien Holders response. Mostly its just learning the ropes, what to do.

I do not solicit other agents or brokers to get their short sales with a split, like some do, but its ok to do that if thats your game. However I do share some info on what a short sale is all about at:
http://www.realhomes.us/shortsale.htm

Once you have learned all the facets and requirements, you may want to just refer short sales out to agents who specialize in them like Greg or others. Those that get the hang of it may just want to do their own and play the waiting game. To me..? Its just business.

Don Sr. / Broker
Tacoma WA

Tue Mar 4 2008, 08:20

So far I have had good success with 2 of the 5 I am working, in my area I'm being referred by a Lender and a Out of Area Real Estate Co.

Mon Mar 3 2008, 13:04

We've also been averaging about a 25% success rate in our office. It really all depends on how "short" the Seller is. We've seen some pretty breathtaking numbers forgiven by lenders. I had an estate which was being sold by a trustee. We came up $14,000 short and my client asked me what we should do? I told him to call the 2nd, $95,000 owed on the property, and see if they would negociate. He explained to them he had a "defunct" estate and they overnighted a $15,000 reduction! Overnighted!! The area is laced with foreclosures so the lender knew what had to be done.
We've had some deals get approved with $250,000 short! There's a reason the "Debt Relief" Bill had a 3 year and $2,000,000 limit. I think those in the higher price points can hold out "longer" and have more resources than those in the lower price points. This has a ways to go!!

Mon Mar 3 2008, 07:48

I had a short sale approved by the lender and the judge in bankruptcy court last week. (representing buyer)

- The tide may be turning,

last years failure to success rate in my counties was 5 failed short sale listings to every closed short sale.

I would take an short sale listing only if I thought it was in the best interest of the seller to do so, and viable from a hardship perspective.

Tue Feb 26 2008, 22:08

I have one finally closing this Friday (2/29/08) on an offer that was first submitted in early September 2007! I have 2 or 3 other offers out on Short Sales, going on 3 weeks without so much as a hint on an answer. I am listing 2 short sales in the next few days ... grab the tylenol bottle and hang on, I guess!

Tue Feb 26 2008, 18:03

interoffice...less than 30%.

We have done ourselves and outsourced.....0% close on outsourcing.

Only 2 out the 22 in our office will entertain a short sale listing and, only then if the owner is fully prepared for what lies ahead.

Too much competition in our local market with REO market to be truly viable in the short sale market IMHO. The benefits do not outweigh the negative aspects in most situations for either the potential buyer or the seller. Change is in the wind though.....I will never discount an entire sector of the market yet, the jury is still out.

Tue Feb 26 2008, 17:30