Short Sales Aren’t Weeds and Won’t Disappear By Summer’s End

Hi Judy.  You're absolutely right. Short sales are here to stay.  Probably for the next 5 years in my estimation.  But I don't think it's the real estate agents who necessarily need to understand this.  It's the banks.  For the past two years they've buried their heads in the sand hoping the problem would just go away and doing nothing to streamline the process.  Finally, finally, I'm hearing rumors and rumblings that some of the banks are going to be implementing new systems that will get short sale closings down to a reasonable 30-45 days.  Like a regular transaction.  Once that happens we will see home prices stabilize and the economy as whole start to pick up again.  I don't know why the supposed "best and brightest" couldn't have figured this out a while ago. I've been preaching about this for the past year and a half.  I just went to a state college and got a B.A.  Good post and best of luck to you.

Jerry - When I tell fellow agents that Short Sales are here for at least 2 or 3 years, you should see the looks on their faces! I can see SSs hanging around for even more than that, and 5 years isn't pessimistic whatsoever. You wonder, don't you, where those financial wizards running our banks got their degrees, huh? To do Short Sales requires 1) an understanding of real estate, which they don't obviously have and 2) administrative skills, which seems beyond them. Let's hope they acquire a new skill-set, because the longer Short Sales are a major part of our economy, the worse off everyone will be. Best of luck to you also.

Short Sales will be around forever...well as long as money is used along with our current monetary system.

Hi Judy: This is what our area charts in Sacramento resembled last year. Now, inventory has declined a bit and prices have risen a bit. Maybe the same thing will happen to your market? Although, I agree, short sales are here to stay for a while.

Elizabeth - Inventory has also declined in Orlando. Prices are waffling. At least they stopped dropping like a rock. Q1 was a disaster. Maybe Short Sales are like a virus. They infect west to east, and clear up the same way? We can only hope.

Tony - If banks stop overextending credit and prices start going up, at least there won't be as many Short Sales. But at this rate, prices won't recover fast enough to save buyers who bought in the 2005 - 2007 timeframe. It's those folks who are facing the toughest times, and it'll take a while to work their problems out of the system. However, this crisis is already affecting people who bought before 2005, and if prices don't stabilize soon, there'll be a new wave of Short Sales.

Judy,

         Great post with solid research. I too do Short Sales and have homeowner's who come to me at five to eight months late with no notice of intent to foreclose. Talk about shadow inventory! I believe this is because they do not want to "put these on the books" as at that point they have to report the loss to their investors, and many more lender's would be going belly up. Short Sales and Foreclosure's are hear to stay for at least the next five to seven years. Wells Fargo who bought Wacovia is piloting a test program with a blueprint of process to funnel homeowners through Loan Mods to Short Sales. Hopefully they will have the ability to discern quickly weather a meaningfull Loan Mod would work and if not expedite the Short Sale process. In areas of declining markets I have seen 10-20K loss every 60-90 days in the value of the Short Sale. I bet you would agree that Short Sale loss could be further mitigated by a streamline process. It is not rocket science. Best of luck to all of us who do Short Sales, and work to keep each other informed.

Rita Legan
         

Rita - Glad to hear about Wells Fargo. I'm working with 2 Wachovia short sales now, so I hope their pilot program goes live pronto! There's no reason --other than lack of will--not to have Short Sales be efficient.

Judy,

        Wow this is really strange. I guess it is a case of from our mouths to God's ear's. Here is a very useful link for you having a Short Sale with Wachovia. This is a free video from Harris University interviewing Robert Jackson from Wachovia! I would also bookmark Harris Blog as they update daily on changing Short Sale issues.

http://timandjulieharris.com/2009/06/26/important-short-sale-information-free-real-estate-short-sale-training/

Best Of Luck,

Rita Legan rlegan@kw.com

Rita - Thanks for the link!