Jameskerry41, Home Buyer in San Diego, CA

anyone know why short sales take anywhere from 3-13 months (if not longer)? ... shouldn't they be called 'long sales?'...lol (just

Asked by Jameskerry41, San Diego, CA Fri May 18, 2012

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6
Jeremy Lehman, Agent, Garden Grove, CA
Sat May 19, 2012
I DO call them long sales. The worst part is, we're 5+ years (this time around) dealing with these sales and they're just as frustrating as they were when we started. It doesn't help that the banks (despite the investors) are completely understaffed and are just now accepting the reality that a short sale is a better option for them than a foreclosure.
1 vote
Kevin and Ju…, Agent, Wildomar, CA
Sat May 19, 2012
Kevin is right, we should call them short pays like we did back in the '90's. (nice reply, btw, Mr. Sanderlin)

The experience of the listing agent is probably the key to the success of the sale. When short pays re-emerged back in late 2007, the servicers/owners of the Notes were under-staffed and under-informed about how to handle them. In the past 18 months or so, just the opposite is true; they want to complete a short sale (pay) rather than foreclose, and in our experience, they are pretty easy to deal with as long as you know what they expect and deliver it to them.

I wish you well on your purchase journey!

Kevin McLaughlin, Broker Owner
Berkshire West Realty
info@BWestRealty.com
http://www.BerkshireWestRealty.com
1 vote
Cindy Davis, Agent, San Diego, CA
Sat May 19, 2012
Yes indeed, short sales are long from the sense of time. The term is used because the seller is 'short' on being able to repay his or her note.

Who knows why? I agree that experienced agents and/or experienced negotatiators tend to get it done sooner instead of later - but still 3 months is the shortest I've ever experienced.

I think we all forget that the banks have thousands of these nationwide and there may be dozens of files (if not, more) sitting on one person's desk. Short sales are complex animals where the bank evaulated not only the seller's situation, but the value of the property, as well.

They're not fun but they are a part of our real estate market.
0 votes
Cory La Scala, Agent, San Diego, CA
Sat May 19, 2012
Hi James,

Great answers. Most of my buyers don't believe me when I tell them that investors are involved at all, and many buyers blame their own agents when things don't move along. It's so much more involved than people think!

Warm Regards,

Cory La Scala, REALTOR
Independence Realty
619-825-6421
0 votes
Kevin Sander…, Agent, San Diego, CA
Fri May 18, 2012
Great question!

The first thing we can do is start calling these short pays instead of short sales.
A short sale is always going to be a Looooong sale.
Last time short sales were around in the early 90's, they were referred to as short pays because the funds were short to pay off the loans.

Second point I will make is that the most loans are serviced by one company and owned by another company. The servicer often has a greater incentive to prolong the process and so that is what happens. They drag their feet and therfore end up making more money.

Third point I will make is that the actual owner of the loan is often a very large and complicated organization with more red tape than any one person can manage. So, even if you do have a logical case to present, nobody can do anything about it becuase all of the decisions are made by guidelines not people.

Fourth point I will make is that banks have not figured out how to determine the value of properties yet. They are usually off by 5, 10, or 15 percent and the investors have not figured out how to deal with this yet.

Fifth point is that most realtors have not closed more than 2 short sales. Therefore, less than 30% of all short sales actually close. The other 70% get foreclosed on. I have found that realtors that have closed more than 15 to 20 short sales, generally have a closing rate between 85 adn 95%. They have figured out what it takes to close short sales and they basically have to commit their entire business in order to continue to do so.

I teach classes on short sales to realtors and homeowners. If anyone would like to contact me about my next class, feel free to do so. It's taken me 5 years to figure this stuff out, I might as well share it.

One more thing, the best resource I have seen on what is going on behind the scenes with these banks, watch the independent film called, "Inside Job". If you havn't seen it, it will blow you away!!

Kevin Sanderlin
Keller Willaims Realty
Cell 858-212-4702
0 votes
Some advice on your deposit money... Make sure you have in writing that it is 100% fully refundable and that if you request it back you do not need the signature of the seller. Sometimes the seller will dissappear and then your money is stuck in escrow forever.

Kevin
Flag Sat May 19, 2012
thank you; i digress and will absorb this information more fully...my last home was sold as a short sale due to a divorce, it took about 4 months...I have a bid currently on a short sale one month in, and no word yet from the bank on whether they'll except my bid or not. 'Fortunately' i'm in a position where I can sit and wait but who the heck wants to do that??!; i want a house! lol...and- especially when other properties pop up for sale..lastly-not to mention they have my $4000 earnest money undoubtly earning THEM interest and me zilch...oh well, so it goes...thank you all again, you're the best!
Flag Sat May 19, 2012
Debra (Debbi…, Agent, Livingston, NJ
Fri May 18, 2012
my opinon?

The banks have no vested interest in moving the tranactions along.
There are no incentives for them to reach quick decisions.
They could care less how people's lives are being impacted.
Perhaps they don't have enough people hired to work on this...or maybe...............they don't want to show the losses...and they aren't losses until theySELL!
Kind of a catch 22.

Now, if there are several lien holders, that can certainly complicate things, but I don't see that as being at the core of the problem


Add to that a level of incompetence, and voila........you sit and sit and wait...........

I had a short sale listimg 2 yrs ago,...listed at 369,000.............best offer we got was 325,000..........seller accepted it...and then it sat...........and sat.............and sat................4-5 months later the bamk finally responded with a counter offer of.........drumroll please.......375,000!!!
Yes, they countered with a number higher than the list price, which was a fair market value price.
The buyer actaully increased his offer to 345,000..............bank not only said NO- they refused to give another counter.....................buyer walked away.

Fast forward.............last week, the house was relisted - 2 yrs later - at 279,000!!!
And.........it's still listed as a SHORT SALE....go figure?.........hasn't been foreclosed on yet...............thats' amazing to me.!

I'd be happy to hear if anyone has other ideas why this level of nonsense is allowed to continue.
Just say NO to short sales.........and stop playing with people.
I wonder what the precentage is of short sales that actually close

Just my 2 cents!
0 votes
thank you very much Debbie; great info!
Flag Sat May 19, 2012
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