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October 26th, 2010 7:30 AM by David W. Welch
I have heard this from several prospective buyers over the last couple of years, and I have shared several stories of short sales that have not gone well. I have also shared several stories of short sales that did go as well as can be expected. Over the last two years I have been tracking short sales here in Orlando, and have found that only 8%-10% of the pending short sales close each month. That does not mean that only 10% close, because some of those same pendings will close next month. Unfortunately, as the months wear on the likelihood of closing goes down. Compare that to bank owned and equity sales that have about 50%-60% of the pendings closing each month, and you can begin to understand why some agents do not want to show short sales.
While I do include short sales in my showings, I also try to educate prospective buyers about the challenges of closing a short sale transaction. Getting an accepted contract with the seller is the easy part. Obtaining an acceptable approval from the seller's lender is the frustrating part of the process, but usually does not involve too much effort from the buyer. The keys to successfully closing a short sale are just like any other transaction, a motivated seller and a motivated buyer. Most sellers at least start out motivated to get the short sale approved, but get frustrated with the process (or lack thereof). Buyers frequently get tired of waiting, and begin looking for other options.
I have found that listing agents that specialize in short sales can close twice as many of their pending listings each month. They have systems in place to follow up with the banks, but the key is that they qualify the short sale better up front. In other words, they identify the short sale situations with the highest likelihood of getting approved. They also have a better understanding of how long the process may take based upon the bank they are dealing with, and can keep you and your prospective buyer better updated.
David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone