I had a call last night from a great friend of mine. She is the kind of person who will do anything for you - one of those people who I think is regularly under-appreciated but should be over-valued!
Anyway we were talking about short sales. Her friend in Florida is facing a bankruptcy and is trying to figure out whether it is better to do the short sale or have the property foreclosed. What I realize is just how much I have learned in this market.
I have helped sellers with a VA compromise sale, buyers with a VA-owned foreclosure, buyers with conventional short sales, etc. My advice for any buyer or seller considering this route is PATIENCE! The bank will often take 2 weeks or more just to assign an internal processor to work with the listing agent - and that only starts AFTER a purchase offer is made on the property. Then it can easily be 30 or 60 days for a response from the bank. I don't think this will be particularly reassuring for the sellers who are reading this, knowing they need OUT now! But I think it is better to let you know what to expect before you head down that road.
In the case of the VA compromise sale, if you have a case agent at the VA assigned, they can be a strong advocate for you, the seller. Good communication with both your real estate agent and the VA is essential for the process to go smoothly. The best part about the compromise sale is you CAN earn back your VA benefit!
For information (and for those who like numbers)... There are currently 443 properties listed as Third Party, Bank, or Government owned (in REIN, the local MLS). This generally signifies properties that have already gone through foreclosure. There are an additional 121 residential properties listed as Short Sales... To put this in perspective, there are more than 15,000 residential homes for sale in REIN as of June 4, 2008 (that is... less than 4% of all properties are short sale or foreclosures, according to REIN.)
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MBA, ABR, EcoBroker, E-Certified, Prudential Military Specialist. Assisting buyers, sellers, and investors throughout Hampton Roads.
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good advice, and interesting statistics. Thanks for sharing them
Thanks for some really good info, we haven't had many in my area yet.
All the best!
I personally lost a transaction after totally informing a Seller about the pros and cons of short sale (in writing, no less) and the transaction was proceeding along very smoothly. We were all on the same page, and I had done my best to be sure the Buyers' agents were totally prepared for the process ahead, and I was able to procure 3 really good offers! After 45 days, the lender FINALLY ordered an appraisal and was having the file assigned to a negotiator (yes, 45 days). I had three great offers on the table ready to be presented, when the Seller's attorney informed them he felt the 1099 aspect of the transaction (which the Seller would be responsible for paying income taxes on) was just going to cause them a bunch of trouble later down the line and he advised it was better to let it foreclose -- which they did! Errrrgh, a learning experience for all involved, but I'm not sure what I could have done differently to have made it fly. I think it's part of the risk of short sale. Any ideas? This Seller was not 1099 exempt because the short sale was not caused by an adjustable rate mortgage. It was a bum deal!!!
Lucky you, many areas here have a third or more of the homes in distress sale.