Short Sales - Real Estate ???

[Sea Draggin]

About 30% of the homes I'm looking at in Atlanta are short sales. The real estate agent says we should stay away from those.

Whats the deal with them and why should we avoid them???

[gman]

Thats crazy talk, I would venture 80% of todays short sales are from the millions of people who lost jobs, took reduced salaries and cant afford the home anymore. As long as the house isnt trashed your fine. Lets say you bought a home in 2004 it was $585,000 but today due to the real estate market crashing its only worth $400,000. May be a perfect beautiful house but the people are upside down and cant afford it anymore

[Sea Draggin]

She says it takes the bank 3 months to approve the offers?

I'm just not sure if its a pay/incentive thing for her or what. I told my wife, if we want to offer on one, I'll just put a 48 hour ( or 2 working days ) expiration on it. If it goes, great! If not we will move on.

[clt_capt]

Basically the bank that holds the mortgage needs to figure out if they are willing to take a "loss" on the sale.

The current mortgage is worth more than the house is, and even if the current owner hasn't defaulted, the bank still has more in the mortgage than it is worth - bottom line the seller is gonna cut and run - and the bank has to decide how to get out with as much of their $$$ as possible

3 months isn't out of line

[Ace1st]

Jim...
Its not the properties that have a problem. The system is the problem.

In my market a huge percentage of our sales are short sales. The problem lies in the process of contracting, having contracts accepted in a reasonable amount of time, and closing in a reasonable amount of time. Some of mine have taken up 4+ weeks to get an acceptance and 12-16 weeks or more to bring to closing. Thats ridiculous!

The banks have so many to deal with they are just not in a hurry to bring to fruition. Not to mention in some cases there are situations where the banks have mortgage insurance on the loans and theyd rather collect on that than to hurry up and move the product.

Another problem is with lending, Right now the credit market is the main reason our market is so stale. They are just making it to hard to borrow money.

But to answer your question, the issue with short sales are due to the system. The process just takes to long and so many unknowns come to light during prior to the closing. If youre not in a big hurry and have the patience of JOBE, short sales are a great product and may save you alot of money.

The best advice I can give you is to make sure that the agent you are working with is experienced with short sales and knows the ins and outs of this process! Good luck!

[Ace1st]

She says it takes the bank 3 months to approve the offers?

I'm just not sure if its a pay/incentive thing for her or what. I told my wife, if we want to offer on one, I'll just put a 48 hour ( or 2 working days ) expiration on it. If it goes, great! If not we will move on.

Take my advice, its a waste of time to put an expiration of offer when dealing with short sales. That will be the first one thrown out. These banks march to a different tune. Presently we as a national association are pushing for federal reform that addresses this issue. Its an issue that is being addressed
across the country. Hopefully the issue will be resolved soon.

[hubris 1]

Dont just buy it because its a short sale. Make sure its in a neighborhood that has an upside potential. Im sure most short sales happen in depressed markets to begin with. If alot of homes are short sale in your neighborhood you probably arent in a "great neighborhood to begin with. Its easy to find what looks like a good deal in a bad market with very little upside potential. I know, Rich people lose money too but, Ill bet not too many short sales happen in Palm Beach, and the like. If you have a chance for a short sale in a marginal neighborhood and a home in a great neighborhood at full price, think hard about what it will be worth down the road. This is why fully educated people with college degrees need their hand held when they buy a boat [surveyor] and a home[home inspector] Common sense and an educated thought process is what you need to look at when you buy anything. In fact the fact that its a short sale tells you it never had the value educated people placed on it years ago. BUY NEIGHBORHOOD, dont get to caught up in the idea its discounted therefore it must be a great deal.

[gman]

My area wasnt depressed at all. I live in a community where the average home was roughly 600-800K plus ... Essex/Bergen County two of the richer counties in the country. Lots of people making good money but a lot of short sales as well

Economy hit everyone including me. I was a young executive of a huge corporation making big dollars but the company downsized when the bottom dropped out and dropped salaries down below levels that could be sustained then dumped all the executives at once to save money. COO, VP of Sales, CFO were all let go for lesser salaried individuals. Even when you have great amount of money saved it only lasts so long when you and your family are living at a certain level

I bought the house right back then but my county got killed, dropped 35% plus a massive reduction in salary plus factor in a nasty divorce .... Not stupid, or un educated ... bad shit happens. Short Sale was the only way for me and someone is getting a steal

[Fritz]

Ill bet not too many short sales happen in Palm Beach, and the like.

Not true. I personally know of several.

Short sales are happening all across the demographic spectrum and in every type of neighborhood. They are not the easiest deals to get done though.

[Sea Draggin]

What does a listing mean that the home is "Approved for a Short Sale."

Are there different types/catagories of short sales? Where one might take less time for approval than others?