I found this Blog article on another Realtors site. He is in Saint George and emailed it to me. Either his experience must be totally different than ours is in general or his motivation is to pick up short sale clients or steer them away from shorts. This is what he says 'Short sales are everywhere, but so few of them are actually closing. Buying short sale homes can be infuriating for buyers as they wait 6 months or more to hear back from the bank just to have their offer declined, or see the home they were purchasing foreclose days before they were scheduled to buy it. Over 1/3 of the homes on the market in Southern Utah are ‘short sales’ but why are so few of them actually getting closed? Lets take a look at the top reasons why and our top 3 buying strategies:  Many short sale sellers DO NOT want to sell their home. Often sellers are simply keeping contracts on their property to delay their foreclosure while they live mortgage-free for months or years. In order to ensure they always have an offer on the table they list their home at a very low price. This price will never be reasonable to the banks so any offers will eventually be thrown out, or countered at a much higher price but while the offer is under review it provides the seller time to stay in their home. Some short sale real estate agents NEVER expect to actually close most of their short sales. Believe it or not, many of them do not even send their contracts to the bank, let alone the back up offers. They simply farm leads from buyers calling on their ‘short sale’ signs. This may sound shocking but all one has to do to confirm this is look at the number of short sale listings a brokerage has (often hundreds at a time) compared to how many are actually closed (outrageously low). It is my opinion that some banks do not want to close the short sale either. Due to government subsidization most short sale transactions net less money than simply foreclosing, but banks are required to consider ‘short sales’ as part of the requirement to receive federal subsidization funds. So after months and months of review, Banks find reasons to invalidate the short sale offer.   “So in the face of this is it even worth looking at Short Sales when buying a home?” Yes, but we recommend looking at your conventional options first. Our team has closed quite a few short sales this year, so it IS possible. Occasionally our clients obtain a great property out of them, but its rare to close on your first attempt or to close quickly. We recommend always looking at re-sales, foreclosures, and new construction FIRST, then turn to short sales as a last resort.   “I really want this short sale, what do I do?” First off, prepare to be patient. Second, consider making a lot of offers at once. We recommend placing 3-4 offers simultaneously on different homes that you would be happy with. This increases your chances of actually closing on one. You can usually walk away from a short sale at any time so you will not be ‘over-obligated’ to a bunch of properties. (Talk to us about the intricacies of this strategy.) Third, insist that your Realtor use a professional short sale negotiator service. We use Rocky Mountain Relief on all of our short sale transactions, a full time team of experts calling the bank DAILY, to push the short sale offer through, in a way that the banks prefer them to be processed. Thats it. Avoid short-sales if you can, but if you must pursue them, do so strategically with an experienced Realtor and a successful bank negotiator at your side. If you have any questions call one of our on-staff Certified Distressed Property Experts (CDPE), Len or Paul and they will happily strategize with you. You can search all of the Short Sales currently on the market at www.BuyStGeorgeHomes.com' Wow! In our experience we have been able to close about 85% of the shorts we list. Perhaps other Realtors are either not trained as to what the bank will accept and who will qualify to do a short and are willing to take any listing that they are offered. If you are a doctor with lots of money in the bank and are trying to short a condo you purchased for your kids... It most likely will not work and it is generally not worth the time. It has never been our experience that a bank will not do a short due to government subsidies. Well... That's not true... Since 2008 when the bailout money was coming for banks this has not been our experience. We have had one seller who fell into the category of wanting to string the bank along and live in the house for free. We gave that listing back. There is nothing in it for us if a client chooses this route. We will not be complicit in an attempt to defraud the lender. There is some good advice here. #1 Be patient... #2 Sellers can dump you even in first position in a short. Make sure you are well qualified. Cash is best. Realtors who know what they are doing put a ton of time and effort into a shorts negotiation. In our case if we get wind you have multiple offers out there we are going to dump you as soon as the first cash offer who is committed comes along. If you don't have cash make sure you have a strong letter of full qualification from a reputable lender... Or be willing to use ours. #3 Make sure your lender knows what they are doing. If they don't, working with an outfit that works shorts on their behalf is probably a good idea. However, those guys want to get paid as well. Thus, the Realtor earns less. Is it any wonder many Realtors steer buyers away from these things? In our experience... And we have a lot as we did our first short sale in 2001... The Short Sale process averages 5 months. We have done it in 3 a few times. If there is just a first mortgage to negotiate with Wells Fargo this may be more likely to be possible. If there is a first and second and the second will get nothing aside from the government pressured $3,000 the first has to give them. It can still be negotiated but it could really take a year. Finally, when you work with us we know which agents know what they are doing with shorts. Trust us when we tell you 'this one is shakey as the agent has never successfully negotiated a short before based on his track record and history.' in a case such as this we might suggest that you do make another offer on a different home just in case. Your agents experience is the difference between a predictable good or bad short sale closing. Make sure your agent knows what they are doing. Many times you can get incredible deals on short sales, but this is not always the case. We just last month closed a short sale in Woodland Hills for the highest price per foot they have seen so far this year in that town. It took a year to negotiate and when we started it was a smokin deal. By the time we closed values had adjusted considerably. Drew

Blog Archive