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May 24th, 2010 1:29 PM by David W. Welch
Short sales have become a very crazy segment of out market here in Orlando. I believe the banks have come around to making quicker decisions a little too late. Two years ago, the banks were not prepared for the influx of the requests for short sales. Today, they seem more prepared, but the market has moved on too. Buyers are placing contracts on multiple short sales as a back up plan while they continue to put offers on REO's. Many short sale sellers appear to be using the short sale to delay the inevitable with no real expectation of selling.
I do not have any real statistics on any of this only my observations in the market. All of the short sales I am currently involved with are getting significant responses from the banks. A Bank of America short sale submitted to equator less than two months ago has been countered and accepted. I am just awaiting the approval letter to get this home closed by the end of June. In this case, my seller was very motivated to sell and the buyer is an investor looking for homes to rehab. I have received agreements on the second mortgages of two other short sale listings, and expect approvals shortly. I also received word that the approval is in on another home where I represent the buyer. The sellers have moved out and my buyer is purchasing his first home. He had his contract on this one just before April 30th, so he will qualify for the first time home buyer tax credit if we close before the end of June.
On the flip side of this, I have seen short sellers who do not make their home very easy to sell. I know that many of these situations are very tough for them, because of financial hardships. They really need to keep their homes tidy and clean. Many times they are at the home when it is being shown, which makes it very difficult for buyers to feel comfortable. I am reading this as unmotivated, but they may not be getting the best advice from their agent. Two of my short sales that are under contract are impeccably maintained, and I advised the sellers to step out while the property is being shown. Both were under contract in a matter of days. Another sign of less than serious motivation is the overpriced short sale. This is not a joke - I recently saw a new short sale listing for $217,000 in a townhome community selling in the $50,000 to $60,000 range. I question what kind of agent even takes that listing. As far as buyers hedging their bets, I hear about that every day. I have an investor who had eight short sales under contract. To date one has been approved and closed, six have been foreclosed and one is still hanging on. I did not say the banks are necessarily saying yes to the short sales; they are not approving quite a few too.
David Welch Real Estate Optimist, Orlando Real Estate