I will venture a guess that five years ago many Realtors had never heard of a Short Sale and few had ever closed one. But with the market meltdown and the sagging economy, short sales and foreclosures occupy a larger part of our market than ever before and they are attracting bargain hunters hoping to get a great deal. There are deals are out there for certain and I can’t really blame buyers for licking their chops at the possibility of picking up a home for less than market value. Most short sales and foreclosures we’ve dealt with have multiple buyers lining up to take these properties. I don’t know of a single seller who wouldn’t want that “problem”.
Finding buyers for all the short sales and foreclosures, isn’t the problem though. It’s the lending institutions who are holding the paper. The amount of time that it now takes to close a short sale or a foreclosure is, in my opinion, ridiculous. In my world, if a buyer makes an offer to a seller, it’s not unreasonable to conclude the negotiations over the course of a few days; maybe a week if one side or the other has their heels dug in about something. But with the banks, that idea goes straight out the window.
It takes months and months for most banks to even acknowledge an offer. If there is a counter, it can take another month to get an answer back. Despite our warnings that short sales take longer than conventional sales, we recently had a buyer who rescinded their offer on a home after waiting 30 days and getting no response from the bank. We have had other sales that took upwards of 6 months to finally close because the banks were so non-responsive. I understand that banks and their REO departments are on over load but it’s time for some changes in the way these deals are done.
If I had a widget company and the demand for my special widgets was outpacing my ability to produce those widgets, I would be adding personnel or shifting existing personnel so I could ramp up production to meet that need. It’s not rocket science. It’s simply time for the banks to find a new way of handling this flood of properties that they want sold.
I don’t know the answer, I’m not a bank. But more and more I talk to other Realtors who are telling me that they are avoiding short sales and foreclosures because the hassle factor is huge and by the time you figure in the amount of time it takes to close one of these properties, agents are working for less than minimum wage. It’s just human nature....would you rather focus your attention on a conventional sale that can close in 30-45 days or a short sale or foreclosure that often has a reduced commission to start with, requires a great deal more work, and can take 6 months before you get paid.
The fact that there are agents and firms who specialize in short sales and foreclosures is a sad statement of our market to begin with. But I have to ask the banks one question....Do you want to sell these homes or don’t you? If you do, then it is time to step up to the plate, pay your Realtor partners full commission, and find a way to streamline this process so we can get your properties sold!
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