They are all of the rage. Sellers don’t want to be forced to do them, and buyers are scared to death of having to deal with them. At the same time, it is often the best option for a seller to avoid foreclosure and get back on the path to rebuilding their lives. They can also be a great deal for buyers.
English: Buyers and sellers in the Plazuela de los Sapos, Puebla, Mexico (Photo credit: Wikipedia)
As a buyer, there are some big differences between buying foreclosures and buying short sales. To begin with, often, short sales are still occupied. I have been in a LOT of houses… foreclosures, vacant homes that weren’t foreclosed, abandoned homes and non-distressed tradition sales. Homes without people in them tend to degrade. Short sales tend to be in better condition and have fewer maintenance issues that need to be dealt with right away.
However, all is not wonderful in the world of Short Sale properties. They have a huge problem. Short sales are risky. The risk is financial, but rather it is time.
- The average Short Sale takes over 9 months to close after going under contract.
- Only 25% of Short Sales actually make it from contract to closing.
So that means that a buyer could go through the better part of a year, only to have the sale fall through because of a lender-based wrinkle. And when 3 out of 4 of them fall out in the process, it equals a MASSIVE waste of time.
The risk is the same for a seller. Months and months of uncertainty followed by disappointment. The desire to get on with financial life gets delayed. It’s no wonder that so many sellers end up giving up and letting the house go to foreclosure.
But, there IS a way out…
Along with the brokerage change a few months ago, I also partnered up with a couple of other agents… one of which is a short sale specialist. As part of the partnering, we have contracted a firm that handles Short Sale Process from contract to close. The firm’s batting average is quite a bit better than the national averages…
- Their average Short Sale takes less than 4 months from contract to close, with most happening anywhere from 2-5 months.
- They are at 82% making it through the process to closing.
This is a huge reduction of risks for both the buyer and the seller… financial, time and emotional. It still isn’t perfect, but 4 out of 5 beats the heck out of 1 in 4. And getting the average time down by half is pretty big, too. That gets Short Sale buyers out of the realm of almost exclusively investors and back into a range that is workable by people that plan to live in the house. That opens up the market considerably. And that means that more of the sales are likely to make it to close.
BTW, Sarah’s close rate is even higher than the 82%.
If you are wondering whether a Short Sale is appropriate for you, please feel free to give me a call, or send a text to my cell or email.
