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Aluc, Home Buyer in Santa Maria, CA

Are short sales actually closing escrow?

Asked by Aluc, Santa Maria, CA Tue Mar 25, 2008

I keep hearing that short sales are long and usually rejected by the lender, however, it seems at least 70% of the homes for sale in Santa Maria are short sales. So are they really selling?

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Short sales are tediously long and drawn out-- usually 60 to 90 days before you get a response. However, they are closing escrow. We have closed 2 of them this month and have several more offers being processed. They can be full of suprises like finding out the owner has not paid homeowner association fees for the past year, and the bank expects the buyer to pay those off as well as the agreed upon price.

Definitely have a professional inspection, but it is just to help you decide whether to proceed with the sale. The bank will make no repairs. However, when the price of the home is still a good deal even after all the extras that may come with the deal, then you are rewarded with a home at an excellent price. You should certainly use a Realtor to assist you with the nuances of the short sale purchase because they are usually even more complicated than other sales.

The short sales in our area are usually closing at or above the "asking price" though so be aware that you be sure that you know the real market value of the home you are considering buying and don't pay more than the home is worth. You can often buy other homes in the area at similar prices because they are trying to compete with the short sales. Happy home hunting!
2 votes Thank Flag Link Fri Sep 12, 2008
Yes, but not at a high rate. My estimate is that 60-80% of the time they fail to close. In the past 30 days, approximately 10% of the closed sales were short sales while short sales comprised about 50% of the active or contingent listings. You should be selective about which short sales you pursue. In my experience, they take 90 days at a minimum to close.
1 vote Thank Flag Link Sun Jul 6, 2008
Are they actually selling...the key to this is 100% the price? That is it. Here in Santa Barbara, Montecito or wherever. The lender is not in control of a short sale, nor is the buyer or seller. Upon receiving an "accepted offer", the lender has to find out whether an investor will buy the loan at the given offered price. If this is close to market, then it should sell. If it is not, then it will not close...and this is representing about 60-70 % of all offers that are out there from what I am seeing.

There was a great article recently in the Wall Street Journal about this and about how 70% of short sales are not closing. I have also written a few articles about this as well at http://www.SantaBarbaraRealEstateVoice.com.
1 vote Thank Flag Link Tue Apr 22, 2008
Aluc,
Linda is right. We all like horror stories, so short sales became a good source of such stories. But they do sell!
Web Reference: http://www.cimpler.com
1 vote Thank Flag Link Wed Mar 26, 2008
ARTUR URBANS…, Real Estate Pro in Burlingame, CA
MVP'08
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I have had success on all my short sale listings. It is perseverance, patience and knowledge, period. It is isn the best interest of the bank to negotiate a short sale rather than process a foreclosure -- and they know it. Most short sales go into foreclosure because: a) the buyer is too impatient with the process; or b) the listing agent isn't proactive enough.

If you find your dream home, the price is right and the listing agent has experience in shorts sales, go for it! All the Best~
0 votes Thank Flag Link Fri Sep 12, 2008
Hi Aluc,

Having several short sales in escrow in Santa Maria at the moment and being on the buying end of successfully closed short sale escrows, I can assure that they are closing. Typically in this area due to the price point of these homes they are take anywhere from 45 to 60 days to close. The main draw back is having the patience to see it through and be prepared to take the home AS IS. Although AS IS sales are very common now and days anyway.

Unfortunatley, I've found too often agents are quick to tell horror stories, give false stats or tell you about the anomaly taking 6 months to close. Most agents have had crazier transactions in traditional sales. If you can afford to have a 60 day escrow to get an awesome deal then a Short Sale might be for you.

Are you currently working with a REALTOR? If not, check out my website or call me direct to discuss any more questions you may have on Santa Maria Short Sales.
0 votes Thank Flag Link Tue Mar 25, 2008
They take long time. The average time of ones I closed as a Listing Agent is three month. I was a Selling Agent recently on a short sale that took 6 months. No one really believed that it is going to happen, but it did.
Web Reference: http://www.cimpler.com
0 votes Thank Flag Link Tue Mar 25, 2008
ARTUR URBANS…, Real Estate Pro in Burlingame, CA
MVP'08
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I don't know how accurate it is, but I've heard a statistic that only one out of four short sales close. I am closing escrow on a short sale this Friday.

If you have time to wait, then go for a short sale. The one my buyer is closing on this Friday took over 4 months!
Web Reference: http://www.DotChance.com
0 votes Thank Flag Link Tue Mar 25, 2008
I know here in Santa Barbara they are actually selling. The process is just long, uncertain, and is slightly different for each bank.
Web Reference: http://www.theziagroup.com
0 votes Thank Flag Link Tue Mar 25, 2008
Hi Aluc,
Short sales definitely do close. They are not easy and usually quite frustrating, but it is very worthwhile. The reason - you can get a house below the market value. Once a house is foreclosed and sold by lender as REO - its price usually climbs back to the market value 9this assuming that prices do not continue falling).
Web Reference: http://www.cimpler.com
0 votes Thank Flag Link Tue Mar 25, 2008
ARTUR URBANS…, Real Estate Pro in Burlingame, CA
MVP'08
Contact
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