Short Sale Know It All
Here in the Folsom real estate market it is pretty hard to avoid short sales when you represent buyers. In every price range there are short sales and most of the time they are listed lower than current market value. (Buyers tend to think they are a good deal) Today there are a total of 263 Folsom homes for sale. Of those 115 are short sales (43.7%). While there are 107 Folsom homes pending, 25 of those are short sales (12.6%). The count of Folsom homes that have sold since the start of March is 45, 10 of them short sales (22%).
So while almost half of Folsom’s homes for sale are short sale, not nearly the same percentage end up sold. As I have said in the past it is a very long process, and there is no guarantee that you will be able to purchase the home for the price you want. Not to mention the length of time it takes.
Now add on top of those issues, a real estate agent who thinks they know how to sale a short sale. At the first of the year a buyer of mine saw a home that would work well for their family. It was a short sale, priced lower than market value. After explaining to the buyer that it had multiple offers and would probably not be approved by the bank at such a low price, the buyer decided to make an offer. The offer was a reasonable offer. When checking with the listing agent about how they handle their short sales, I was told that all offers would be submitted to the bank and the bank could decide which offer they wanted. I told my buyer that this did not look good, because the current (well known) process was to submit the highest and best offer to the bank and keep any that wanted to stay in backup in a file. Experienced short sale agents know this. I told my buyer not to get their hopes up.
Three months later and now this agent tells me that the short sales were not getting anywhere (probably because they did not know what they were doing) and they have hired an attorney to help in the short sale negotiations. You know what the attorney told the agent. That they were going to submit only one offer to the bank! The rest they would hold onto as backups, in case the first buyer walked.
While my buyer has patiently been waiting, another offer came in on the house that for weeks we were the only offer. And of course it has also been submitted. I am being told that it is higher and all cash. Had only one offer been submitted to the bank, three months ago, my buyer would stand a good chance of purchasing that home. Not now.
If you are a home seller, and you are considering selling your home as a short sale, please make sure your agent knows what they are doing. If they don’t it can cost you time and possibly a successful short sale outcome.
If you are a buyer, if you can avoid short sales, do so, if you just have to have one, ask your agent if they think the listing agent knows what they are doing. At least you will know what you are getting into.
As for me, I will have my buyers try to avoid this well known agent’s short sale listings, unless they can confirm they are using experienced short sale negotiators.