Crystal estimated that about 30% of short sale contracts eventually make it through to being approved.
The flip side of that math is that 70% of short sale contracts are rejected or just left unapproved until either the foreclosure occurs or the seller finds some other way out of the predicament. While a 30% success rate( a .300 batting average ) is good for a baseball hitter, it is not so good for an outfielder. (Imagine the outfielder not being able to hold on to two out of three fly balls hit into his glove.)
I know this is metaphor soup, but wasn't the field of dreams built in Indiana? Anyway, the fact that 7 out of ten short sale contracts fail is not the fault of buyers agents, or even the lisitng agents -
The high failure rate of short sale contracts is due to the procedures that the mortgage holders follow, the political and economic climate, internal bank, servicer, investor, and asset manager policies. NO Realtor will honestly claim that they can make short sales as easy as regular sales or even foreclosure sales.
There is a perception (which is generally untrue, on average) that short sales are better deals than regular purchases. One reason that the perception of an extreme bargain is mostly false is that the lender will insist that the sale price be very close to market value. If it is required that the price be close to market value, then how is that such a screaming bargain?
Oh, close enough could be 5% below market value, but even that difference may be offset by the fact the physical condition of many short sale properties is as bad as some that hae already been foreclosed upon.
Also, the terms: buyers closing costs, requests for repairs, transaction closing costs, are likely to be borne by the buyer, not the seller. - This chips away seriously at even a 5% discount.
Peter, working hard on your behalf, for me, means explaining to you, and concvincing you, why you should only consider looking at and offering on short sale listings only as a last resort, only after all other suitable properties have been considered.
Please link to my profile for contact information if you are interested. I have posted voluminously on the subject in the past on Trulia.
I will concede that the probability of a short sale reaching approval has improved 3 fold (as I predicted) since my earliest posts, when Sacramento area short sale batting averages were below .100
I live in Roseville, mostly represent buyers. I am booster for Roseville, Rocklin, and Granite Bay.