Are short Sales really that bad?

Asked by Vanessa, Vermont Harbor, Los Angeles, CA Wed Mar 10, 2010

i found a couple of homes that ive liked and the agent im dealing me wants me to stay away from these. is there any particular reason why? Im looking in the LA area 90037/43. Some he tells me have multiple offers already and im thinking, whats one more right? Should I stay away from short sales as he says? Honestly, all the decent looking homes $200K and under are all short sales. What should i do? Stay away from these and keep looking? For example MLS# 08-291929 and MLS #Y904137 .

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59
Deborah Brem…, Agent, Los Angeles, CA
Thu Mar 11, 2010
Dear Vanessa,
The landscape of short sales has changed DRAMATICALLY in the past 6 to 18 months. While all of the complaints you have heard, both from your agent and below, may have at one time been true, things are different now.
Why? There are several factors that have impacted the short sale market.
1. Lenders are now fully staffed. Loss mitigation departments that were overwhelmed when this market changed now have trained staff in place to handle the number of files they are accommodating. Lenders are also better able to predict what properties will become short sales, based on offerings of loan modifications and better market information.
2. Training is at a much higher level, both with lenders and with agents. One caveat: there are still agents who refuse to acknowledge this segment of the market, bury their heads in the sand, and WON'T SELL SHORT SALES, or even get information and training for short sales.
3. Most lenders now have STREAMLINED SHORT SALE PROCEDURES, meaning that files which used to take 6 months are approved in 45 days. I had a short sale with Wells Fargo approved in 19 days last month. In addition, lenders such as Wachovia are now giving incentives such as $5000 moving bonus to the seller and 30 day approvals. Gone are the days of months and months with no answer.
4. Second and third trust deeds are willing to take much less on their liens, allowing short sales that were held up in the past to proceed.
I would suggest the following for you.
1. Watch this video:
http://www.youtube.com/watch?v=WACxMut0fWQ
A video with a young couple, Jen and Matt, two first time home buyers who HAD NO OPTION but to buy a short sale, because EVERYTHING IN THEIR PRICE RANGE was a short sale. (Sound familiar?!) They dispel myths and tell you what to watch for. Very helpful.
2. Get an agent TRAINED AND CERTIFIED in short sales, with experience in closing short sales. Ask how many short sales they have done, how many they have closed, what certifications they have, and what advanced training they have. Ask about the lenders they have worked with, and what their lender database includes. Also, what is their closing ratio? If you need a referral in your area, let me know. My agent database of REO and Short Sale Realtors is extensive. (The best of us all work together)
3. Please feel free to contact me with any questions directly. I can explain the process in more detail for you, and answer any specific questions you may have.
Hope this helps.
Deborah Bremner, SFR, CSP
REALTOR, 00588885
Certified Short Sale Professional
Certified Short Sale Foreclosure Resource
Certified Home Retention Specialist
(D) 818.564.6591
TheBremnerGroup@gmail.com
Blogging at: http://TheBremnerGroup.com/blog
4 votes
Mike Abbott, , Sisters, OR
Thu Mar 25, 2010
Vanessa you are facing a couple of battles when dealing with short sales, not all coming from the lender. Short sales can be an excellent bargain if you can be patient, and you have an agent that knows what to do. If you are purchasing the agent should give some basic advise as to what you could face as well as possible time commitments. Hopefully you will work with an agent who has been trained in the process, (MOST HAVE NOT). Because we may not know what to do should not stop you from going after what you want. Interview agents and ask them if they are trained and certified in the process, again most have not. Next you mentioned that the homes you thought were decent 200 and under were short sales. If you take nothing else from this, take this away please. The listed price you see is established by the listing agent and the seller. An acceptance of the offer meens little as the third party/lender must agree to the sale price offered and if it was priced to low just to receive a bunch of offers can slow the process down. Lenders/banks/investers, whoever is holding the mortgage has whats known as a DISCOUNT THRESHHOLD RATIO. If the price offered after adding in all end of transaction exepenses, commissions, 2nd lean % pay off etc. falls below this threshold it is likely a deal will not be done without the buyer coming up with more $'s. Your agent needs to know approx. how low the lender will go. Good luck
2 votes
Melissa Zava…, Agent, Escondido, CA
Thu Mar 18, 2010
Lots of folks have already answered your questions. Personally, I'd say that a short sale is only as strong as its weakest link. I've closed hundreds of short sales. But, if I were representing a buyer, I'd want to be darn sure that the listing agent could get the job done right. Otherwise, I would not waste my time. So, make sure you have a crackerjack agent representing you !
2 votes
Cathy Bureau, Agent, San Antonio, TX
Wed Mar 31, 2010
As a SFR (Short Sale Foreclosure) designee I wouldn’t say to run away from short sales but you need to know what you are getting into. Most agents are afraid because they hear bad things but don’t have first-hand knowledge.

Step 1 – if you want to get into distressed properties then find an agent with a Certified Distressed Property Designation, Short Sale Foreclosure Designation, or has listed and closed multiple short sale properties.
Step 2 – Have your agent ask how many liens are on the property and is there a short sale pre-approval in place?
Step 3 – know the following:
• At this point in time you will not qualify for the tax credit
• Minimize contingencies
• Expect 30 days for response to offer
• Expect 90-120+ days to close
• Because lender and seller will not do repairs, buyer must have their own money to do repairs
• An executed offer is required to submit to the lender for an approval
• The option period is the same as traditional purchase; the short sale is simply a contingency
• If this is an investment flip, the buyers should do additional due diligence as they may not be able to flip the house
• Buyers must sign a short sale contingency disclaimer
• The inspection is to determine what the buyer is actually buying but the property is as-is, whereas
• The option period is as usual, days are based from effective date

Step 4 – BE PATIENT!

Good Luck!


Cathy Bureau, MBA, REALTOR, Green, SFR
Broker-Owner
GREEN Home Realty
(210) 378-2489
Cbureau@greenhomerealtyco.com
1 vote
Jim Stewart, Agent, Avondale, AZ
Thu Mar 25, 2010
Short sales can be incredibly good investments. I recently closed a short after waiting 4 months but here is the deal. 2000+sqft w-pool, jaccuzi, 3b2.5 bath short accepted at $135k, owners older and want to rent at $1300/mth. Paid cash by getting refi equity from primary residence at 5.25%, actual out of pocket cash $15k, loan of $120k PIT+HOA less than $700/month. Rental Income pays everything PLUS gives me a return of 19% on my hard cash invested, tell that to the banks that might pay 1% on savings! Short sale houses are generally in much better shape than are bank owned.
1 vote
., , 92705
Fri Mar 19, 2010
Short Sales are not bad if you are patient. It could take upto 1yr to close a short sale. In the meantime you could miss out on the Tax Credits. Rates are also expected to rise a some point this year. Also, here in the southbay some neighborhoods are actually heating up and driving prices higher.

So when it comes to buying a short sale you have to way the consequences of waiting it out for a lender approval or buying in todays market taking advantage of the Tax Credits, low rates, FHA loans (only need 3.5% down) and low prices.

By the way I looked up the MLS #'s for the 2 homes you listed above.

08-291929 - Backup
Y904137 - Hold

Hope that answers your question.

Monica Hernandez - REALTOR(R), SFR
Century 21 Amber Realty
23705 Crenshaw Blvd Suite 100
Torrance, CA 90505
310-293-3335
dre lic 01239118
1 vote
Amanda Searcy, Agent, Dallas, TX
Thu Mar 18, 2010
If you have no timeline or urgency when it comes to your closing date (meaning you don't have to move in by a certain date, your lender is flexible or you are paying cash, etc.) then go for it. You also have to know that there is a chance that you could wait and wait and wait for your closing date to arrrive only to find out that the sale won't ever happen because the bank changed their mind or has decided to counteroffer at a higher price than you originally agreed upon with the seller, etc. Basically, the chances of a whole lot of work, effort and patience can be compeltely wasted - and you generally won't find out that it has been a waste of time until you have already put a whole lot of blood, sweat and tears into it (as well as your agent). If you can avoid them, I would.
1 vote
Jim Luby, Agent, Barrington, IL
Thu Mar 18, 2010
Should you stay away from short sales and keep looking? It depends. It depends on your timeline and your patience threshold. I believe it also depends on the agent listing the short sale. If you can be patient waiting for a response to your initial offer, with no guarantee that your contract will be approved by the owner's lender(s), then purchasing a short sale can be a tremendous opportunity. I believe it also depends on the agent listing the short sale. If they have no experience with short sales or cannot competently negotiate the transaction on behalf of the owner with the owner's lender(s), then you might want to stay away. In my experience you can waste time chasing short sale purchases if the listing agent isn't qualified in handling these types of sales.
1 vote
dave, Agent, Charlotte, NC
Thu Mar 18, 2010
I do not know the California market . However; I do know short sales and have dealt with over 40 of them in the past 18 months. I have been on both sides of the coin.

The quetions you need to ask yourself are:
Can i wait it out up to six months maybe longer and still get a NO?
How is the home overall? Odds are the seller is already dong a short sale they are not going to do any repairs to the home.

I think if you can answer yes to those questions you should look at a short sale. You want to make sure your agent asks the right questions as well of the listing agent. Find out who the bank is, is the seller paperwork in already or ready to go in?, Is there a second lien on the property? Has a BPO ben ordered? These answers will help you know how far along the process is and what you cna expect for a wait time.

I have sold enough of the short sales to know they are a good deal right now.....

dave diCecco
Realtor/Broker SFR
http://www.davedicecco.com
1 vote
Sherry Kotvis…, Agent, Riverside, CA
Tue Mar 16, 2010
I agree with Jeri! Maybe it is time to look for a new agent! But don't just jump into it. Interview agents and find out how many successful short sale transactions they have closed. Staying on top of their education in terms of short sales is important too.
An agent that just point blank recommends you to stay away from short sales is doing you a grea dis-service. There are plenty of homes out there but you need an agent that knows which ones to persue and which ones to stay away from. This all comes down to experience. Best to you in your search!
Web Reference:  http://www.sherrykhomes.com
1 vote
Jeri Creson, Agent, Studio City, CA
Mon Mar 15, 2010
If your agent is truly hoping to stay away from short sales, maybe it's time to look for a new agent. The market is significantly impacted with short sales, and honestly, unlike things were a year or more ago, short sales just aren't that tough.

Multiple offers are the norm on every property in this market. One cannot escape that. What can be done, however, is to use strategy when you shop to be the accepted offer amongst the multiples. There are several ways to accomplish this. One way is to create the cleanest, strongest offer you can afford to make. Put as much (up to 3%) as you can afford to offer as earnest money deposit to demonstrate that you are willing to have skin in the game. Be willing to do inspections and put earnest money deposit in escrow upon sellers acceptance, and open escrow if your offer is the one chosen. Again - demonstrate that you're willing to put your money where your mouth is.... A good listing agent will recommend an offer that demonstrates that it is serious, solid and committed to sticking with the short sale process above even a slightly higher offer that doesn't offer these assurances.

In the past several months I have closed 4 different deals where my clients offer was not the highest offer - but it was the strongest, and most certain. Short sales are very do-able - as long as good strategy and good business practices are employed.

IMHO - Good luck out there!
1 vote
Jane Grant, Agent, Aguanga, CA
Thu Mar 11, 2010
Vanessa: Short sales can be well worth the wait, but your agent needs to do some detective work that it sounds he/she does not want to do.

If the short sale is near "Approval", then it will take much less time to close.

Bottom line is that a lot of agents don't like to do all of the research that it takes to find out from the listing agent if the short sales is one that has a good likelihood of closing or not.

Every short sale is different because they are all "subject to", the original lender's approval and some sellers simply do not qualify to do a short sale.
Web Reference:  http://www.soreal.biz
1 vote
Emily Knell, Agent, Huntington Beach, CA
Wed Mar 10, 2010
If your agent doesn't want to show you short sales, it's probably because they don't understand them and they've probably never listed or closed one.

In areas where there are many many short sales, you need to be working with an agent who understands short sales and will show them to you. You don't want to miss out on a great deal because your agent is only showing you 20% of what's available.

The reason you need a good buyer's agent who understands short sales is because your agent needs to PROPERLY interview the listing agent to get a feel for whether or not you'd be wasting your time with it.

It's not really that the short sale is tough to do, but it's super tough if the listing agent is a ding bat.

Even if multiple offers are already on the table, by all means Submit an offer, you have no idea where the listing agent is going to be when the primary buyer backs out & whether or not the back up buyers they have now, have or have not found something else in the meantime. Have your agent write a GREAT cover letter about you & how much you want the house,,, you can't just be another number!

EmilyKnell1@yahoo.com
562-430-3053 cell
1 vote
Paul Argueta, Agent, West Hollywood, CA
Wed Mar 10, 2010
Ultimately, it really depends on the agent representing the property being sold as a short sale. If the listing agent representing the short sale is familiar with the process and has submitted a COMPLETE short sale hardship package on behalf of the seller that has been approved it DRAMATICALLY improves the possibility of a buyer successfully buying and closing the escrow. All too often banks get a bad rap when the reality is the listing agent did a poor job laying the foundation for a successful short sale transaction by not submitting all the required documents. Believe it or not, there are some banks that have been able to get us approvals in 72 hours or less when a complete package is submitted. Short sales will be the NEXT WAVE of default real estate sales and they streamlining the process even more.
1 vote
Coachpatmart…, , Tampa, FL
Wed Jul 7, 2010
Coach Pat here jumping in....
Short sales are phenominal but not all short sale deals are created equal.
I do agree that you need to be wise and pick a realtor/broker that not only can think outside the box and be solution minded but that person needs to have systems and processes in place for a successful outcome for both the buyer and the distressed seller. I have always maintained that realtor/brokers need to do what they do best...be a frikken realtor. I buy and re sell short sale deals every month to the tune of 50 to 75 deals to some months over a 100. Find a realtor that is hooked up to an investor and the investor is paying for the third party professional negotiation firm to handle the short sale negotiations. Look for deals that a realtor is re selling for the investor and the approval letters for the short pay are forth coming within 60 days.
Once the negotiations are complete, the investor pays cash, closes and purchases the short sale. The investor now can close and sell you the property and typically you will still get a fantastic discount because having a third party firm with former bank loss mitigators will get a much greater discount than what realtors can get negotiated. These guys usually have contacts at the banks and can get approvals at the lowest possible price the bank will allow. This is how the investor can make his margins and still get you a fantastic price for your new home. Always deal with a realtor that has their investor back by an attorney and backed by title. This method is a fanatastic solution for all parties involved and if an offer comes in too low and a profit can't be made for the investor the investor in my case will back out, eat the $3500 for the negotiation fees and allow the the distressed homeowner to go under contract with the buyer that the realtor found for the investor. When we are successful, we will guarantee a 6% commission for our realtors and make up any difference from our profit from the deal.
The huge problem the short sale industry faces is the lack of experienced real estate professionals that have a legal proven system in place that is solution minded. Beware of those realtors that insist on handling the bank negotiations personally themselves. These good hearted realtors are placing thmeselves at an unnecessary litigious risk for getting sued by a distressed homeowner when that realtor/broker fails at the bank negotiatinos. Can you smell a settlement and a pay out of the brokers E & O policy.
Watch the commercials on TV...Did you lose your home to foreclosure? Your not alone and it's not your fault! Did your realtor fail at the bank negotiations? You could be awarded compensation. Call the law offices of whoever for a free consultation..
If you are a realtor you owe it to your distressed homeowner to get in touch with me.
I have $3M in escrow at a title company with a credit line up to $10M. I like to purchase in the price range of $400K to $3M.
Thanks,
CP
Offices San Diego, Seattle, Dallas, Florida, St. Louis and South Jersey
0 votes
Coachpatmart…, , Tampa, FL
Wed Jul 7, 2010
Coach Pat here jumping in....
Short sales are phenominal but not all short sale deals are created equal.
I do agree that you need to be wise and pick a realtor/broker that not only can think outside the box and be solution minded but that person needs to have systems and processes in place for a successful outcome for both the buyer and the distressed seller. I have always maintained that realtor/brokers need to do what they do best...be a frikken realtor. I buy and re sell short sale deals every month to the tune of 50 to 75 deals to some months over a 100. Find a realtor that is hooked up to an investor and the investor is paying for the third party professional negotiation firm to handle the short sale negotiations. Look for deals that a realtor is re selling for the investor and the approval letters for the short pay are forth coming within 60 days.
Once the negotiations are complete, the investor pays cash, closes and purchases the short sale. The investor now can close and sell you the property and typically you will still get a fantastic discount because having a third party firm with former bank loss mitigators will get a much greater discount than what realtors can get negotiated. These guys usually have contacts at the banks and can get approvals at the lowest possible price the bank will allow. This is how the investor can make his margins and still get you a fantastic price for your new home. Always deal with a realtor that has their investor back by an attorney and backed by title. This method is a fanatastic solution for all parties involved and if an offer comes in too low and a profit can't be made for the investor the investor in my case will back out, eat the $3500 for the negotiation fees and allow the the distressed homeowner to go under contract with the buyer that the realtor found for the investor. When we are successful, we will guarantee a 6% commission for our realtors and make up any difference from our profit from the deal.
The huge problem the short sale industry faces is the lack of experienced real estate professionals that have a legal proven system in place that is solution minded. Beware of those realtors that insist on handling the bank negotiations personally themselves. These good hearted realtors are placing thmeselves at an unnecessary litigious risk for getting sued by a distressed homeowner when that realtor/broker fails at the bank negotiatinos. Can you smell a settlement and a pay out of the brokers E & O policy.
Watch the commercials on TV...Did you lose your home to foreclosure? Your not alone and it's not your fault! Did your realtor fail at the bank negotiations? You could be awarded compensation. Call the law offices of whoever for a free consultation..
If you are a realtor you owe it to your distressed homeowner to get in touch with me.
I have $3M in escrow at a title company with a credit line up to $10M. I like to purchase in the price range of $400K to $3M.
Thanks,
CP
Offices San Diego, Seattle, Dallas, Florida, St. Louis and South Jersey
0 votes
D. Mathews, , Yucaipa, CA
Thu Apr 29, 2010
Unless your agent is giving you alternatives and a choice, short sales will dominate the landscape for many more years. With that said, however, you need to ask yourself-Are short sales really good deals! In my opinion, they are not. Frenzy buying and multiple offers are pushing prices above actual appraised market values. When you work with a seasoned, experienced Buyers agent , (hopefully the one you are working with now), you will find that there are motivated home owners who aren't in trouble or upside down, that will not only sell their home at a fair price but will also be flexible with the terms. It's your agents responsibility to find those homes then negotiate on your behalf with the seller in order to consummate a win-win deal.
0 votes
Phyllis Cros…, , Tampa, FL
Wed Apr 28, 2010
Short sales... well let me put it to you this way...no mans land...lala land and disneyland--all rolled into one.

No mans land because some agents don't know the territory.
Lala land...because.. no one seems to know who's desk the file is on at the sellers' lender
...and disneyland..because the buyers are excited to move in..but the reality is "it may be just a ride".
However if you are patient, and your Realtor is aggressive...you may just have a closing.



I would suggest you asking your agent.... about Bank owned properties.. and please use an agent familiar with the process...including both short sale and bank owned properties.

Oh, and Buyer Beware... watch out for short sale negotiator fees.

Phyllis Crosby, Realtor/GRI
ReMax Top Notch Associates
Tampa, Florida
813)886-2356
phylliscrosby@tampabay.rr.com
0 votes
Mike Linkena…, Agent, Jacksonville, FL
Wed Apr 28, 2010
NO! Its all about finding a good agent who is experienced and can guide you through the process:
0 votes
Matt Van Win…, , Seattle, WA
Wed Mar 31, 2010
I've found that short sales don't have to be that bad. It is important to go into it with the right outlook. Short sales take time and patience, but in my experience most close. As the buyer you need to structure the offer in an attractive way, but then also be ready to wait.
0 votes
Kevin Ramos, , Albuquerque, NM
Tue Mar 30, 2010
Vanessa,
Short Sales can definitely be a nightmare. The key is knowing what the banks are looking for and how to present offers to them. I highly suggest finding someone who is well versed in short sales. One way to do that is to find an agent that has a CDPE (Certified Distressed Property Expert) designation. Even if your agent does not have the designation ask him or her to find listings that are listed with CDPE agents. These will have the best chance of actually closing and letting you know what to expect.
All the Best,
Kevin Ramos
RE/MAX Alliance REALTORS
0 votes
Ted and Anne…, Agent, Stafford, VA
Tue Mar 30, 2010
The short sale process has "seemed" to be getting more streamline as the industry learned to process these sales. They are handled very much like a loan application process-requesting 2 years tax returns, bank statements, pay stubs, hardship letters, etc. Despite our leaps and bounds and occassional successful sales, often the bank is looking for any reason to deny the short sale. They make the process extremely difficult and the Listing Agent has to be extremely dilligent and push the bank through the process. This means endless calls to the bank, faxing and refaxing the same documents. The issue from a Buyer Agent's position is that most of us have seen our clients waiting around for weeks or months just to have the short sale denied or the home end up in foreclosure. After having several buyers disappointed I make sure that any of my buyers considering short sales understand that they are easily going to have to wait up to 3-6 months for a response. In the meantime, there is still no guarentee that it will be approved. The Listing Agent not the Buyer's Agent controls the communication with the bank. If you have the flexibility of time it can be a great opportunity to find a home that most buyers are not considering. Good Luck!
0 votes
Phyllis Cros…, , Tampa, FL
Tue Mar 30, 2010
So...why bother...search the Bank-Owned Market. You can close in approx. 30 days. Know the difference and be sure to utilize the service of a Realtor well versed in both. Any Realtor representing a buyer who doesn't call the listing Realtor about their contract at least once a week...will probably end up on the back burner.

Phyllis Crosby, Realtor
ReMax Top Notch
(813) 886-2356
phylliscrosby@tampabay.rr.com
0 votes
Randy Rehler, , Austin, TX
Tue Mar 30, 2010
You need to have a face to face, heart to heart sit down with your realtor. You goal is to explore both of your concerns regarding "short sales". Here is a short list of the most likely concerns of your realtor when acting as the buyer's agent in a "short sale". 1) My client will not see it thru. 2) The listing broker will try to short my commission, because the lender is shorting his. 3) The contract will "blow up" because of the bank, seller, other realtor. 4) The "blow up" will occur on the day of closing at the closing table. 5) I will not only lose this deal, but my client in the process after months and months of work.

Here are the questions you should ask yourself: 1) How good of a deal am I getting after going thru all this trouble? 2) Am I prepared to see this thru only to have the home snatched away at closing?

Ultimately you are the principal (boss) and you call the shots.
0 votes
Justin, , San Francisco, CA
Mon Mar 29, 2010
Just today in the news they were reporting that banks are answering Short-Sale offers quicker then they have been in the last 6 months.
0 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Thu Mar 25, 2010
Hi Vanessa, I would consider short sales as a part of a broader search that includes all available inventory that meets your criteria. Short sales are generally uncertain and frustrating - and so I would not limit myself. Incidentally, if you are hoping to take advantage of the tax credit, then I would focus on traditional deals since it is unlikely you will qualify given the lengthy timeframes generally involved with short sales.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
D. Mathews, , Yucaipa, CA
Thu Mar 25, 2010
Working Exclusively as a Buyer only agent, I run into major problems all the time with listing Brokers and Agents who have no system set up internally to handle the paper work, follow-up, and most importantly the negotiations. The most important thing that I tell my clients.. is the fact, that according to all of my information and data with regards to homes sold via Short Sale and/or REO. Over 90% were sold at or over current market value. The bottom line is; Why buy a "as is" short sale or Reo when you can purchase a nice move in ready home, in a great neighborhood, for the same price$$. Keep looking. They aren't as hard to find as you might think. Flexible, motivated sellers (not in trouble), are everywhere, if you know how and where to find them.
0 votes
David Morris, , Birmingham, AL
Thu Mar 25, 2010
Hi Vanessa, The reason that all the homes in that range are short sales is because the market hasd been inflated so much over the last 10 years. I grew up in the Bay Area and ther the short sale market is at about 400k. Keep at it, look at tax records and try to find someone before they go into forclosure, that is the easiest, although it is still a fairly long haul. The new regulations should help but they actually don't go into effect until 2011.

Good Luck

David Morris
Listing Agent
EFI Realty
Birmingham Alabama
Web Reference:  http://www.equityfound.com
0 votes
Tim C. Lorenz, Agent, Mission Viejo, CA
Thu Mar 25, 2010
The federal government put in place some new rules that will help short sales become less of a problem. It will require the lenders to answer the seller's in less than two weeks weather they will allow the property to be sold as a short sale. That will change the market considerably. Individual buyers are not waiting for 4 to 7 months for an answer. When it takes that long the buyer goes on to something else.

Vanessa go look and buy.
Web Reference:  http://www.markandtim.com
0 votes
Carmela Sant…, , Fairfield, CT
Wed Mar 24, 2010
If that is the price range you in and everything is a short sale, try it. Multiple offers is not the problem. Even if the agent you are using is knowledgeable in short sales, they can still be complicated. Do a google search on short sales and read up on it. There are also on line videos you can view.
0 votes
Karen Parsons…, Agent, Laguna Beach, CA
Wed Mar 24, 2010
Hi Vanessa,

Every situation is different, yes, they can take a long time and you will find it more "fun" to find an equity seller....but there is no reason not to submit an offer to a short sale...someone is buying these homes. It sounds to me like your agent is lazy and is looking for an immediate payoff....not someone looking out for your best interest and getting you the right home.

I think maybe you should stay away from your agent, and keep looking at short sales. :)

Karen
0 votes
Carmela Sant…, , Fairfield, CT
Thu Mar 18, 2010
Most agents don't understand short sales. The reason they are difficult is it can take 3-6 months to close. There may be more than one bank that holds the mortgage. The 1st bank makes an agreement with the other lenders as to how much they will receive from the sale.

If you put an offer on the home, there is no guarantee your offer will get accepted in a multiply offer situation. You can wait a long time. Another home may interest you and you end up walking away from the short sale. This is one reason short sales fail. No one ever explains to the buyer all the ins and outs of it.

There is also no guarantee the agent will get paid.
0 votes
Joyce, , Wyandotte, MI
Thu Mar 18, 2010
A short sale is not bad, it's a lot of work, any agent that wants you to stay away, obviously is making to much money or just likes the easy money in any case, customers should always be a priority and I would never turn away a customer because they are looking at a shortsale home. I am currently working with 4 shortsales, two in which I am representing the buyer and 2 the seller. In today's market I can't afford to pick and choose clients based on how easy the sale is.
0 votes
Matt Soares, , Media, PA
Thu Mar 18, 2010
I know a very good agent in So. Cal. that has a very good success rate with Short Sales. You want to make sure that if you are going to pursue a Short Sale that your Agent is familiar with the process and knows how to engage not only the Listing Agent but also any third parties.
0 votes
Sky Minor, , Los Angeles, CA
Thu Mar 18, 2010
Vanessa,
I hear this question asked by all of my buyers. You've got to remember the universal human truth that if it seems too good to be true, it usually is. Your agent's job is to get you into a house. If you spend your time chasing short sales that already have several offers on them, you are probably not going to get a house. What you could do is write offers on those short sale listings and on the outside chance that one gets accepted, then persue it.
0 votes
Louwu, , Irvine, CA
Thu Mar 18, 2010
@Dan Chase,


99.99% of banks/ss lenders out there use a cost-benefit analysis ratio coupled with a BPO to gauge the market. If an offer comes in that either 1) nets them no loss or 2) meets their cost-benefit ratio and BPO then it's a nobrainer to immediately reply with a YES.

Just an inside peek into the whole asset management process that a bank goes through with short sales...



Cheers,


Lou
0 votes
The Cascade…, Agent, Issaquah, WA
Thu Mar 18, 2010
Short Sales can take a long time to complete, but you can often get a better than market deal also. In general there aren't any "Unbelievavble Deals" out there. The banks do a Brokers Price Opinion to determn in the sale is justified by market conditions.

That being said, you can get a home for less than the current owner owes.
0 votes
Dan Chase, Home Buyer, Texas City, TX
Thu Mar 18, 2010
Just yesterday someone said they got a short sale with wachovia through in 2 days. Apparently some banks take forever and others can work quickly.
0 votes
Louwu, , Irvine, CA
Thu Mar 18, 2010
Let me tell you what happened on two separate cases (all that happened this week)

Case 1: Got 3% closing costs, SS approval letter was achieved within 2 months, mortgage closed within 2 weeks in a downtown los angeles high rise. Seller's agent knew what he was doing, i knew how to close. Easy Breezy.

Case 2: SS Lender (the bank that owns the trust deed) *RENEGED* on closing at last minute (we were going to docs - no more conditions). My client already spent about 1000 in appraisals and inspections. He got royally screwed by IndyMac.

Conclusion: most non-approved SS take a long time to even get an approval and even if you get an approval, SS Lender still has right to refuse *THEIR OWN APPROVAL LETTER* and royally screw you in the process (although this circumstance is VERY rare - this has only happened once in the 8 years I've been in the industry). Bottom line, it's riskier and more time consuming but you usually get the best deals because of reduced competition. Personally if you can find an estate sale that's priced 10-20% below market I'd jump at it if it's comparable to the type of home you'd find in a SS. Just my 2 cents as an agent, broker, direct lender, investor, REIT manager.

Cheers,

Lou
0 votes
Sherry Kotvis…, Agent, Riverside, CA
Thu Mar 18, 2010
Not all short sales are created equal.

I would ask your agent why he/she is recommending to stay away.

For example, if there are multiple offers it may be that your offer would be in 'back up' position and not in 'first place.' It is important to know that if your offer is in back up position, the offer in first place position must withdraw their offer before yours of many others will be considered. Often times the buyer in first position does get tired of waiting so you could still have a chance at a property.

It will be helpful if you have a sit down meeting with your agent to explain the process. It is complicated and can be frustating if you don't know what you are in for.

Lastly, make sure your agent specializes in short sales. Working with an agent that does not will prove to be a waste of time.

Sherry 'K' Kotvis, MS
Distressed Property Specialist
Web Reference:  http://www.sherrykhomes.com
0 votes
Denise, , Jamaica, Queens, NY
Thu Mar 18, 2010
As an investor, the process of negotiating a short sale requires lots of patience. It could take up to a year to get a bank to complete the process and approve the offer. The reason why most realtors have a problem with short sales is that most do not have the experience to negotiate them and the bank will not deal with them unless the have a serious buyer with a serious offer.

That becomes a dilemna if the realtor does not have a buyer, it delays the process of the short sale. A lots of things factor into this process. For example: if it is not already an approved shortsale the process is long, tedious and requires expertise and skill. You can end up faxing the same financial documents to the bank 10 times and they still would claim they have not received it. They banks are making it more difficult to do these. I have two that I am negotiating and at this point, refuse to take on anymore. Good luck with your decision if you do decide to pursue them, just know you have to be patient
0 votes
Kmbrennan, , Florida
Thu Mar 18, 2010
Vanessa,
No - they are not. They are however, more work for the realtor and tend to take longer to close. Some realtors want to be paid quickly and with less work and others are mearly not experianced with process.
Be aware that short sale purchases can be frustrating and do take more time. That is the cost for finding a potentually unbeatable deal in price.

hope this helps.
kevenbrennan1@comcast.net
0 votes
Mike Linkena…, Agent, Jacksonville, FL
Tue Mar 16, 2010
No. Short Sales aren't that bad if you have a good agent that knows what they are doing!!!
0 votes
Dianne Hicks, Agent, Rancho Bernardo, CA
Sat Mar 13, 2010
Vanessa

I say... as long as you are patient... go for it. You are right, what's one more. Here is the most important item to know. You must be an offer that is within fair market price, not listing price. As long as you keep that in mind, do it! Have you agent pull the recently sold homes in that direct neighborhood. Not within 1/2 mile but across the street... ONLY THAT NEIGHBORHOOD, that is key.

Short sales close everyday. I went to one today that had just lost their 3rd buyer, people are not patient... they want it and they want now!!! Just because there are mulitiple offers do not mean they will be around at the end.

Try to submit offers in backup position also, ones that took offers a couple of months ago. That is about how long it takes for these buyers to move on. Almost every home has mulitple offers these days in our area.


Good Luck!!!
Web Reference:  http://www.di4homes.com
0 votes
Tonya Brobeck, , Everett, WA
Sat Mar 13, 2010
Vanessa,

I just answered a question very similar to this one. I would encourage you, if you haven't already to look at the other questions posted and read some more suggestions, pro's & con's, and learn as much as you can so that you are able to make an educated decision as to if you want to stay focused on short sales or perhaps move forward towards non distressed homes.

I think short sales are a nightmare most of the time. I hear horrible stories day in and day out. I also hear of great deals, an extreme amount of stress the buyer went through to make it to closing but in the end got a GREAT deal on their perfect home.

Depending on the area you are looking there may even be non distressed home owners selling fairly comparable to the prices of the distressed homes. At least something to look at with your agent and compare.
0 votes
Dan Chase, Home Buyer, Texas City, TX
Sat Mar 13, 2010
They absolutely can be. Sometimes short sales turn into a turtle marathon race.

Q. Put in a full price offer on short sale last May.Just heard bank said offer was too low. Can they do this after 10 mos. of stalling? Any options?
http://www.trulia.com/voices/Home_Buying/Q_Put_in_a_full_pri…
0 votes
Pebble Singha, Agent, Woodland Hills, CA
Sat Mar 13, 2010
Short Sale are great buys. You just need to find the right combination of Buyers Agent who is patient , Listing Agent who knows how to do short sale and a motivated seller. Unlike REO's Short Sales are mostly in better condition if occupied (i said mostly), the seller has to disclose all negative facts about the home.
NEVER EVER WORK WITH A LISTING AGENT(sellers agent) WHO WANTS TO SUBMIT MULTIPLE OFFER TO THE SELLERS LIEN HOLDER. Run away. In a multiple offer situation, the seller should pick and accept one offer and that offer needs to be submitted to the bank. Rest should be kept as a back up.
Have patience and you will get a great deal.
Check out my web site for more on short sales http://www.pebblesingha.com
Web Reference:  http://www.pebblesingha.com
0 votes
Dallas Texas, Agent, Dallas, TN
Sat Mar 13, 2010
You can always submit an offer HOWEVER I recommend for any of our clients KEEP looking not necessary true you submitted an offer will you receive acceptance from the lender.

Short sales and foreclosures you have drama to prepare yourself for "that ride" many agents stop working with these types of sales transactions.

Lynn911 Dallas Realtor
Web Reference:  http://www.lynn911.com
0 votes
Leanne Finlay, Agent, Kirkland, WA
Sat Mar 13, 2010
So long as you have an legally written Addendum to the Purchase and Sale Agreement that provides for you to terminate your offer at any time prior to mutual acceptance by the seller and sellers lender, why not go for it?

Why do you care about this? Well, if you've made an offer on a short sale property, but the bank hasn't approved the offer, and you find another property - wouldn't you like to be free to fuggeddabout the first property?
0 votes
Sylvia Barry,…, Agent, Marin, CA
Thu Mar 11, 2010
Short sales can be great bargains for a buyer if you are dealing with agents who knows about short sales and knows how to follow up and close the deal. My clients have gotten GREAT deals with short sales, patience and clam makes for a successful deal.

Go for it. You might have to find an agent who knows how to work the short sale though.

Best,
Sylvia Barry
Marin Realtor
Frank Howard Allen Realtors
(415) 717-0293
Web Reference:  http://www.SylviaBarryRE.com
0 votes
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