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September 10th, 2009 6:50 AM by David W. Welch
Here in Orlando we have thousands of short sales active and pending. The last time I ran the numbers in the MLS, there were over 10,000 properties identified as short sales. There has been a recent change in our MLS as far as some of the data fields are concerned that relate to identifying short sales and REO's. We should have much better numbers for tracking these as the bugs get worked out. I have posted a number of stories about short sales and the short sale "process." One of my realtor.com blogs was quoted in the Colorado Springs Business Journal yesterday. In that particular post, I was crunching the numbers on the dollars being lost by banks as short sales languish in the pending drawers for months at a time.
I did get good news on one of my short sales last Friday. JP Morgan Chase has finally approved it, and provided a written payoff letter. Fortunately, this buyer really wants the house. It is a terrific buy in Baldwin Park, and she has stuck with it through this entire process that began six months ago. Many buyers give up. I received an approval on a Countrywide back in May, only to have the buyer back out of the deal. You cannot blame him since it took eight months to get that one approved. Just a word of advice about the short sale process. When preparing the preliminary HUD have your title company over estimate everything, because the banks are knocking just about everything down. In essence they are making everybody pay for their mistakes. I understand that they are losing tens of thousands of dollars, but they made the loan in the first place.
I guess if you agree to work on a short sale you are accepting some risks too. Make sure you go into it with your eyes wide open. Whether you are a buyer a seller or an agent, there are risks with short sales. For the buyer, you may be able to get a great deal, but the bank may ask for more money from you. The may ask for a higher price up front or more money at closing to make the deal work. Sellers should be aware that the bank may ask you to bring some money to the table to get the deal closed especially if it was not your primary residence. Agents who have not listed or sold a short sale should be aware of the numbers in your market. Here in Orlando there are over 4,000 short sales pending, but fewer than 300 closed last month. They are taking anywhere from six months to over a year to get approvals. I think some of this may change over the next several months, but right now this is what we are experiencing here in the sunshine state.
Orlando Real Estate, David Welch Real Estate Optimist