Short Sale Facts – Are they worth it?
I get a lot of questions on Short Sales and currently I am dealing with three of them right now that are difficult, a lot of my time and more work than any other transaction by far. So are they such good deals?
They can be but each deal is different and if there is a second mortgage on the home it’s even harder to get approval. Also, there is now a trend to charge the buyer a negotiation fee for the privilege of making a bid on a short sale! This really makes my job more difficult when the question comes from my buyer wanting to know why they should pay the fee. Shouldnt the seller pay it? It is complicated to say the least and recently I had the highest negotiation fee I have ever seen. My buyer is being hit with a $6675 negotiation fee for the privilege of making an offer. This is just getting out of hand and it will be interesting to see in the future how this plays out. I for one think there needs to be some sort of cap put into place on what these guys can charge and how they charge it. So with that I would like to share this report for those that are considering a short sale and a video that I think speaks clearly and sheds light on this new era of home selling that we all find ourselves in.
They seem like such a great deal but the truth is that after the negotiator fees that are usually charged and the waiting for months on the chance that the bank will accept that low listing price you might become so frustrated with the process that you walk away. Do you know that 80% of all prospective home buyers that put an offer on a short sale end up rescinding the contract due to waiting?
The below report shows statistics from the NWMLS for Realtors on how many are waiting for bank approval. As you can see 132 of these cancelled their offer. If you really want a great deal than look at Bank owned or the traditional owner occupied. They go quicker and sellers are more willing to negotiate with you.
Total Short Sale Activity Snohomish County last 90 Days
Pending BU – (no lender approval) 91 Units
Pending (lender approved) 89 Units
Sold 81 Units
Cancelled 132 Units
Expired 99 Units
Total Units 492
Failed Transactions: 46.9%
Comparative Values – Snohomish County Solds last 180 Days priced between $180-$325,000
Average Median Price per SF
Retail Sales $259,936 $260,000 $160.49
Short Sales $249,319 $255,000 $145.21
Bank Owned $239,595 $239,250 $134.11
Home Price Extrapolated based on Average Price per SF (1600 avg)
Short Sale: $232,336