Category Archives: Short Sale

Short Sales – Taking it Personal

Posted on February 11, 2010 | 1 comment

I have landed in a place where I am selling a few of the properties I own, in a short sale position. It seems like a year ago there would have been ridicule and maybe a little pity for those poor folks who find themselves in this situation. I struggled to come to grips with this reality and felt some remorse. Now we all know someone who is facing foreclosure, being “upside-down,” late on their mortgage payments, or trying to short sell their home.

Short sales may currently comprise up to 75% of the market right now. All arrows are pointing to 2010 to be the year of short sales. Supposedly banks are getting government incentives and getting a clue in general. Oppose to letting these homes foreclose, a short sale is now the most workable route for both the owners and banks. Personally I’ve had successes with short sale at the end of last year and one already this year, which has changed my demeanor toward them. Now I trudge through the grueling process of pushing my own properties through.

I met with an agent and his buyer at my 4-plex that is up for short sale yesterday. After handing me the offer we discussed the short sale process. The other agent commented, “They should be called long sales, not short sales!” For the most part, very true. I just closed one that took the bank 4 months to approve. While another one that I listed got approval in 1 week! I still stand in unbelief. I just contacted an agent representing a short sale property, where they had a buyer waiting for ….. 15 months!!!! before they said, “Uh, this is ridiculous! We’re outta here! [my conjecture]”

I hold my breath and wait to see how my own experience will transpire.

Enjoy,

Keith Klassen

Real Estate Broker

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Posted in Short Sale

Tagged advice, Buyer, buyers, buying, Foreclosure, Questions, Real Estate, Realtor, Sacramento, Short Sale

Short Sales Revisited

Posted on December 17, 2009 | 1 comment

In past posts I’ve been adamantly against short sales due to all the hiccups involved. It is still true that a buyer needs patience, emotional disconnect, and a reality check, however, this year and the years to come might be much different.

Definition – Short Sale: When a home’s value is less than the money owed on the note/mortgage; This produces a scenario where the lender (one holding the note) is given the opportunity to approve or reject an offer to “forgive” the difference between the offer amount (and real estate fees) and the current amount owed on the loan.

To reiterate:

1) Patience – I closed a few short sales this year for buyers and the average wait to hear back from the bank on an approval was 2 months. I currently have an offer out there for a client on a short sale and we’ve waited about 4 months with no approval from the bank as of yet. The other agent keeps saying, “soon, soon… hopefully soon.”

2) Emotional Disconnect – This is a tough one… How does one make an offer on a home to live in and not become somewhat emotionally attached? It can be such an emotional roller coaster! Here’s the real picture – one can make an offer and finally hear back from the bank 2 months later, only to find out that the sale is not approved. Or, what is more common, there is no approval or call back, just the information that the home has gone to foreclosure.

3) Reality check – Much of the time short sales are listed in better condition and less expensive than REO/Bank Owned properties. Why is that? That’s what I ask my clients. Here is the answer – the agent is never sure what the bank will accept until an offer is received and submitted to the bank. So, in fact, the listing price is not completely accurate. And it stands to reason that an agent might just list it for lower in an attempt to garner offers.

Here’s the other side of the coin. I just took a short sale listing. The seller’s were very cooperative in filling out our short sale package. My staff and I were diligent to contact the bank. We did out own Broker Price Opinion (BPO) and due diligence. We priced it fairly and receive multiple offers. We picked the best one and submitted it to the bank with all of the information they requested (we knew this ahead of time). The offer was accepted and approved by the bank within ONE WEEK! I add the emphasis because my jaw also dropped with I heard this news. I can’t really take too much credit either, but I do know that the banks appreciate a complete package and agents that have their act together.

Bottom line, my faith is renewed for short sales. Also this coming year I believe that along with government incentive, laws being pasted, and banks getting more adept at dealing with short sales, this segment of the market will be huge.

My company is primed and geared to entertain many short sales in the year to come. Let me know if you have questions, or think you are a candidate for short selling your home.

Enjoy,

Keith Klassen

Real Estate Broker