This article reinforces what many buyers and buyer’s agents already know i.e., there are more short sales listings than REO listings on the current market. Owners are realizing that there are alternatives to just walking away from their property so they’re trying short sales. Still, long wait times discourage many buyers and their agents from wanting to make an offer on these.
Banks still need to get their act together to get short sales done more quickly. Name another industry in the US where a buyer comes in and says, “I want to buy one of your non-performing assets (excess inventory that’s sitting there)” and their response is, “We’ll get back to you in 3-6 months with yes, no or maybe.
I’m an experienced short sale agent and I try to steer my buyers away from them. Many agents won’t even show short sales to their clients.
I read yesterday that some big government agency said that the worst of the foreclosure mess is just about over. I think he’s reading the wrong tea leaves.
Until the next article: “Bringing you the best information and knowledge about Short Sales, so you can make the best decision.”
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Short sales have jumped from about 10 percent of distressed property sales during most of last year to 15.9 percent of home purchase transactions.
By contrast damaged real estate owned or bank owned properties accounted for only 13.4 percent and move-in ready bank-owned accounted for 13.8 percent of all sales, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.
As recently as November of 2009, short sales accounted for 12.4 percent of the home purchase market, behind move-in ready REO (Real Estate Owned aka bank owned) at 12.6 percent and nearly even with damaged REO transactions at 12.3 percent.
Short sales typically result in lower lender losses and houses left in more saleable condition. Moreover, borrowers that agree to a short sale can often buy another house with mortgage financing after only two years. For borrowers going though the foreclosure process, mortgage financing can be unavailable for a period of five to seven years.
Short sale properties are most often purchased by first-time home buyers, the January survey results revealed. Currently, mortgage servicer approval on offers for short sale properties can take several months, making these transactions difficult for current homeowners who often need to conduct not one, but two, transactions in quick succession. In contrast, first-time home buyers more often have flexibility around the timing of short sale closings.
“Short sales activity took a temporary dip in November around the expected expiration of the first-time home buyer tax credit,” reported Thomas Popik, research director for the Campbell/Inside Mortgage Finance survey. “Few first-time home buyers wanted to take the chance that their short sale transaction wouldn’t be approved by the November 30 deadline. But now that the tax credit has been extended, we see first-time home buyers once again snapping up attractively priced short sales.”
Survey results showed that short sales typically sell for only 91 percent of listing price. In contrast, move-in ready REO sells for 99 percent of listing price, on average.
The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions polls more than 1,500 real estate agents nationwide and provides up-to-date intelligence on home sales and mortgage usage patterns.
From Real Estate Economy Watch www.realestateeconomywatch.com
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