Real estate short sales seem to be getting the cold shoulder from buyers compared to foreclosed properties. Anyone having a different experience?

Asked by Voices Member, Gainesville, FL Thu Nov 26, 2009

Real estate short sales seem to be getting the cold shoulder from buyers compared to foreclosed properties. Anyone having a different experience? Many are taking 6 - months to close and many buyers get weary before the transaction reaches closing. This happens even with the information provided up fron that the time frame can get long and drawn out and other obstacles reviewed prior to the purchase offer being submitted. Any input you have will be appreciated. Real Estate Gator.

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Mark LeMenag…, Agent, Lake Nona Orlando, FL
Tue Mar 16, 2010
Earl, I see that you asked this almost 4 months ago. Has your opinion changed in that time? Mine certainly has.
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Bev Koriban…, Agent, Wexford, WA
Tue Mar 16, 2010
Media makes it sound like the best way to go is with foreclosures so the emphasis is placed in that arena. This sometimes raises the forecosure price since you may have a bidding war going on.
While on the other hand short sales are made to sound long and drawn out. They are the better buys because they have an owner and a history to them. The water, electric, and gas are most times still on. Banks will sometimes pay the transfer taxes. Agents will also shy away from these because you never know what the commissions will be like you do with foreclosures. I have known some agents to direct clients to other avenues because of the uncertainties they feel. IF you inform your client of the process ahead of time and the time limits and the reasons why it is a longer process then they understand and are willing to go through it with you. Plus tell them if they aren't flexible with the price then they do stand a chance after waiting all that time of losing the house. Some clients feel that they have control of the price and they don't. The bank will want what they want in a lot of the cases. In some cases, I had an answer from the bank in two weeks and we closed in 2 months. Bank never even vountered and the price offered was much lower than asking. HOWEVER, I like the estate sales that are priced to me hey are the best ones to go for. They need updating but the process is quick.
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Jane Grant, Agent, Aguanga, CA
Tue Mar 16, 2010
Earl: My experience is that it depends on the buyer. Some VA and FHA buyers know they cannot compete with conventional and cash offers on Bank Owned Homes so they are willing to wait. It takes more work on my part to find them a home and keep up on the status with the listing agent to make sure that things are progressing.
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Karen Parsons…, Agent, Laguna Beach, CA
Tue Mar 16, 2010
Hi Earl,

Buyers are smart enough now to know that short sales are a mess, but they can also get a good deal if they are worked properly. In some of my areas, we have few choices but short sales, so we have to do the best we can with them.

I always push to open escrow and have my buyers be the only offer sent to the bank. If they have already sent an offer, then I try and position us as first back-up. If I can get this type of committment, then I find that buyers are ok with waiting.

But to really answer your question....if a buyer can get a quick answer and move forward by either a bank or an equity seller....then that's much better.

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Dan Chase, Home Buyer, Texas City, TX
Tue Mar 16, 2010
One person on here said a few days ago that they waited 10 months after offering the ASKING price only to be denied. Who wants to go through that? That story gets told a few thousand times and buyers forget that option exists.
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Lisa Morales, , Gainesville, FL
Tue Mar 16, 2010
When I get buyer calls, most of them tell me right from the start, "I don't want to look at short sales." The media has already given them the idea that it's going to be a nightmare and take a long time to deal with and they don't want to wait.
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Jim Cheney, Agent, Santa Rosa, CA
Fri Nov 27, 2009
Boy, in Sonoma County Short Sales are hot. Listings go into escrow fast and are often in escrow the first week they come on the market, frequently with multiple offers.

I tell my clients that the benefit to a short sale over a foreclosure, is disclosures. At least when a seller is involved you can count of receiving all mandated disclosures about the home. I feel that has tremendous value over a bank owned property.

Jim Cheney, Your Rincon Valley Realtor, Serving Rincon Valley, Santa Rosa and the Sonoma Wine Counties real estate needs.
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Mike Luzzo, , Orlando, FL
Fri Nov 27, 2009

You asked:
Anyone having a different experience?

BTW: YES. This is the most recent closing 11/25/09. Buyers just closed on Wednesday after being in contract for 9+ months (wrote offer February 2) why? The buyer agent and myself constantly kept the buyers in the know and reassured them every step of the way. This mortgage was originally a Countrywide mortgage now of course serviced by Bank of America and anybody who is anybody that does shorts knows how notoriously slow CW/BoA is. On top of that back in late August BoA sold the note back to the investor! Now we had to start again but this time there was no middleman in the middle.

Truly if you can understand this: when the bank is mitigating "the bank" is 98% a servicer of that mortgage and is not a decision maker on the note. Hence the middle man. That's where the delays occur.

But why did the buyer stay 9 months +? They were purchasing a home that they wanted at 90% of the value when they closed. The 9+ months saved them $38,000! And put them in an equity position. Time equalled money!

See, Earl. The biggest problem with short sales is that in the buyers mind - Time DOES NOT Equal Money-
Hence the buyer sees no value. If agents create substantial financial VALUE for the buyer...they will stay...I do it all the time.

Happy Short Selling!
Mike Luzzo
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Connie Smith, , Gainesville, FL
Fri Nov 27, 2009
Hi Earl
So far I have managed to avoid the shortsale pit. However others in the office have not and all I can tell you is that it is a nightmare. The problem seems to be in the banks. One hand does not know what the other is doing,the short sale department seems to have been set up in a hurry and no one knows what to do. Most buyers are looking to buy in the short term and the short sales, despite their name is a long process.
Foreclosures are available now . An answer is available immediately and you move thru the process in a timely manner.
Good luck!
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Deborah Schn…, Agent, Madeira Beach, FL
Thu Nov 26, 2009
Yes I agree too...we have found that short sales are taking longer and buyers are getting tired of waiting. If you have a time frame in which you need to buy a home don't look at short sales. There are plenty of good deals out there if you know where to look. If you are looking in Pinellas county I can help find you a good home for a fair price.
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