St George Insider

Short sales are everywhere, but so few of them are actually closing. Buying short sale homes can be infuriating for buyers as they wait 6 months or more to hear back from the bank just to have their offer declined, or see the home they were purchasing foreclose days before they were scheduled to buy it.

Over 1/3 of the homes on the market in Southern Utah are ‘short sales’ but why are so few of them actually getting closed? Lets take a look at the top reasons why and our top 3 buying strategies: 

• Many short sale sellers DO NOT want to sell their home. Often sellers are simply keeping contracts on their property to delay their foreclosure while they live mortgage-free for months or years. In order to ensure they always have an offer on the table they list their home at a very low price. This price will never be reasonable to the banks so any offers will eventually be thrown out, or countered at a much higher price but while the offer is under review it provides the seller time to stay in their home.
• Some short sale real estate agents NEVER expect to actually close most of their short sales. Believe it or not, many of them do not even send their contracts to the bank, let alone the back up offers. They simply farm leads from buyers calling on their ‘short sale’ signs. This may sound shocking but all one has to do to confirm this is look at the number of short sale listings a brokerage has (often hundreds at a time) compared to how many are actually closed (outrageously low).
• It is my opinion that some banks do not want to close the short sale either. Due to government subsidization most short sale transactions net less money than simply foreclosing, but banks are required to consider ‘short sales’ as part of the requirement to receive federal subsidization funds. So after months and months of review, Banks find reasons to invalidate the short sale offer.

“So in the face of this is it even worth looking at Short Sales when buying a home?”

Yes, but we recommend looking at your conventional options first. Our team has closed quite a few short sales this year, so it IS possible. Occasionally our clients obtain a great property out of them, but its rare to close on your first attempt or to close quickly. We recommend always looking at re-sales, foreclosures, and new construction FIRST, then turn to short sales as a last resort.

“I really want this short sale, what do I do?”

First off, prepare to be patient.
Second, consider making a lot of offers at once. We recommend placing 3-4 offers simultaneously on different homes that you would be happy with. This increases your chances of actually closing on one. You can usually walk away from a short sale at any time so you will not be ‘over-obligated’ to a bunch of properties. (Talk to us about the intricacies of this strategy.)
Third, insist that your Realtor use a professional short sale negotiator service. We use Rocky Mountain Relief on all of our short sale transactions, a full time team of experts calling the bank DAILY, to push the short sale offer through, in a way that the banks prefer them to be processed.

Thats it. Avoid short-sales if you can, but if you must pursue them, do so strategically with an experienced Realtor and a successful bank negotiator at your side. If you have any questions call one of our on-staff Certified Distressed Property Experts (CDPE), Len or Paul and they will happily strategize with you. (435) 215-2852

You can search all of the Short Sales currently on the market at www.BuyStGeorgeHomes.com