Trying to understand short sales
Lets face it, folks. Short sales are here to stay for a while longer. As a Realtor, I am struggling to try and understand this process. And yet the more I learn, the more I want to stay away from them. If you are anybody in this arduous process, be it broker, buyer or seller, be ready to use patience and diligence, and be ready to be thoroughly confused.
Perhaps you have already purchased or successfully closed a short sale. Congratulations. You are now a short sale expert, right?
I was at my weekly office meeting yesterday, and my colleagues were discussing current sales that they are working on, and situations that they have encountered recently. All of the confusion that we vented at our broker was concerning short sales. I felt as though I was an intern at a staff meeting for a company that I just got hired at. I barely could follow what everyone was talking about!
“Is there a negotiator assigned yet?” “Is their second and third forgiven?” “Is the seller aware he has a second?…did you change the status to short sale or does the seller not know his property is short-sale status? Can it be a short sale if the seller hasn’t filled out the package?” “Who is the lender? Ooohhhh, not them. They won’t call you back for months.”
AGHH! Last I checked, I did not have my J.D. but feel as though I am pushed into a changing tide of real estate where we as Realtors are put into a very precarious position of having to counsel our clients on their financial choices and repercussions concerning their loan, their house, and the sale of their house. I don’t know about you, but I feel way in over my head.
Not to mention the success (or failure) rate of short sales that actually close. I opened my local paper yesterday where I found 13 homes in my area about to go to auction in the next two weeks. Many of them are currently for sale as short sales, and many of those short sales are “active -contingent status” meaning the seller has accepted an offer but buyer and seller are waiting on the bank to agree to the offer. They better work it out quickly, because it is foreclosing in a matter of days.
Which brings me to my point…why bother with short sales? I know they are here, and there is potential for good deals, but at what cost? Realtors are now advertising homes as “Not a Short Sale! Easy to close and ready to go!” understanding that buyers today are sick of dealing with the hassle and lack of response that goes with short sales. While waiting for a response from the bank, interest rates could rise making their offer unaffordable and thus not valid.
Is it easier to just wait for the property to foreclose?