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July 14th, 2009 7:11 AM by David W. Welch
Banks could make my life so much easier as a Realtor, if they would just make up their minds about what they are going to do with: short sales, REO's and loans. Right now in Orlando there are over 7,200 pending contracts, around 6,000 short sales and 1,000 REO's. Over 4,000 of the pending contracts area short sales and REO's, with short sales outnumbering REO's 3 to 1. If all the pending contracts were pushed through, the number of sales closed in Orlando for the year would jump by over 70% - talk about your stimulus package. Realtors, title agents, surveyors, appraisers, loan originators, handymen, lawn services, movers, Home Depot and Lowes, taxes, HOA's and condo associations would get paid. The banks would also get paid. Remember 4,000 of those closings are short sales and REO's. That is 4,000 toxic mortgages taken off the books, and the only thing holding it up is the bank's inability or unwillingness to make a decision. Think about this too. Around 3,000 of those pending sales are not short sales or REO's, that means the sellers of those homes will be able to purchase another home or invest their proceeds. If the banks could make timely decisions on short sales, we could probably sell the other 6,000 in fairly short order as well.
What does this mean to the bank? Last month in Orlando, the Orlando Regional Realtor Association reported that REO's sold for a median price of $79,900 while distressed "short sales" sold for a median price of $152,000. I know it is a leap to say the banks would make an extra $72,000 on each deal, but it sure looks that way. If you applied that difference to the more than 3,000 pending short sales, banks stand to bring in an extra $216 million. Apply that same logic to the other 6,000 short sales in the Orlando real estate market and the total comes to almost $650 million extra that banks could be putting in the vault. If you can keep people in their homes that is even better, but if you can't then facilitating the sale will significantly reduce the banks' losses. Last month over 3,600 new contracts were written, but only 2,100 transactions closed. Demand for Orlando real estate is back, and with a little cooperation from the banks our good year could be a terrific.
Orlando Real Estate, David Welch Real Estate Optimist