I’ve seen agents roll their eyes and wring their hands when discussing short sales. Dealing with the lenders is not often easy, and the process can be complex. Even still, short sales are on the rise: [Thanks L!]
Short sales are increasing as a percentage of home sales in many states, helping some neighborhoods and homeowners avoid the more devastating impacts of foreclosures.
Short sales — when lenders allow financially strapped borrowers to sell homes for less than their unpaid mortgage — accounted for 12% of home sales nationwide in the second quarter. That’s up from 10% in the same period last year, says researcher RealtyTrac.
The increases were sharper in some states, including California, Nevada, Michigan, Georgia and Colorado, the data show.
If you are interested in a short sale though, be prepared for a long grind:
“We lose buyers constantly because short sales take too long,” says Beth Peerce, president of the California Association of Realtors. Short sales completed in the second quarter took 245 days, on average, RealtyTrac says. In a June survey, 77% of California Realtors called short sales difficult or extremely difficult; 15% said clients were foreclosed on while pursuing short sales.
A few years ago it was very difficult to make a short sale happen. Lenders were loathe to reduce the principal owed. This has changed, however.
At BofA, Vice President Dave Sunlin says balances are forgiven more than half the time.
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I am seeing much more short sales and foreclosures in and around Nashville Tennessee. From my experience, I have seen that over valuations of the properties by the banks and mortgage companies as the number 2 issue behind the absurdly long time frame to complete a short sale. Buyers need to be educated about the time required to buy a short sale before they make an offer.
You have provided really very good information, thums up and I agree with u, short sales take too long time.
I can tell you that it takes awhile for sure in Las Vegas. We have had an offer accepted by the owner nearly a month ago and we are being told that the bank is just now starting to get their paper work together and a negotiator in place. I am wondering if prices go down in the meanwhile can we argue the bid price down?
Metro-
I’m not sure– but I figure it never hurts to ask!