Short sale specialists will tell you that you are missing the boat if you are not involved with these transactions in the greater Phoenix real estate market.
I completely disagree!! 
Here are 7 Good Reasons not to get involved with short sales.
- Average time to get acceptance (or more likely a denial) from a lender is more than 75 days. Some agents say longer.
- There is no guarantee the offer will get accepted at or near that price because the majority of Realtor list homes at random arbitrary prices that they think or hope the banks will accept.
- estimates as high as 80%, some say 90% of offers on short sales do not consummate in a closed escrow
- 3 month waiting periods prevent buyers from looking for other houses which often result in opportunities lost.
- REO /lender owned listings are now priced as well or better than short sales. Make your offers on these homes.
- Lenders are more inclined to reject offers that do not have financing with large down payments. Many FHA offers are rejected due to high decline ratios and lengthy underwriting times.
- Banks are just not cooperative. In most cases, they prefer to reduce current REO inventory. Further, they can often collect PMI from insurers if the home actually is foreclosed upon.
I have prepared short sale packages for approval for sellers. I have negotiated contracts with bank asset managers. I have represented buyers with success. I have watched buyers wait and wait and miss out on other opportunities.
If you are thinking about buying a home, skip short sales. They Suck!
Instead, make offers on the many REO and lender owned properties on the market.
There are REO at as much as 50% discount to 2005 prices in Phoenix, Scottsdale, Carefree, Peoria and Fountain Hills.
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Copyright © James Wexler *Short Sales Suck ! - 7 Reasons Why!*
If you are listing your home as a short sale in Phoenix Arizona or Scottsdale Arizona make sure you hire an agent who knows how to do short sales and has the experience to get the job done.
Call 480.221.8080 to find out more about Phoenix AZ Short Sales and Scottsdale AZ short Sales
james - I just had a bank cancel a short sale (because they are working with the sellers on a loan modification), and my buyer moved on to another property.
Sharon - with your permission I am going to write a blog on my outside (of Active Rain) blog regarding this happening more and more.
I have heard stories , though I cannot confirm, that banks will cancel contracts with buyers if a short sale modification can get done
Sounds like breach of contract, but I am sure there is some small language, aka. 'fine print' which allows them to do so
Sharon - I spent money and time to market a property as a short sale.
Unfortunatly, the same thing happened and the bank accepted a loan modification. another reason not to get involved with short sales and banks
nothing more I hate then working with buyers of short sales.
you submit offers and then sit and wait for a bank to approve the deal , god willing, and more likely not approve the deal and we do all that work and get clients hopes up for nothing
Jason -
I have been writing an on-going series called Short Sale nightmares on my blog : Wexzilla (outside of AR) ,
you would not believe the stories
I am done with short sales.
No reason to even put a package together. Banks dont want them , so why waste your time.
Nick - I understand your frustration.
A loan modification is a much better use of your time and you can charge somoene for your time and efforts and have a much better likelihood of getting a loan modification approved
James - I couldn't agree with you more. I heard of one short-sale that after 8 months, the bank strong-armed the buyer into approximately $4,000 additional in costs. Another short-sale lasted 9 months, and when the bank attempted something similar with that buyer, the buyer walked away.
There are far too many games being played in the "short-sale" environment. I'm not comfortable with it.
James ... Nobody ever said there was anything short about a short sale except for the lenders payoff. These can take some time. There is money working these if you stay with it. Yes some will not work out, while others will
Myrl - bank really are aggressive with buyers , making them wait up to 8-9 months and then charging fees ... whats a buyer going to do at that point? ?
I guess, like you said, they can walk away, but usually if they have waited that long, they probably really want the home
Roland - you raise a good point.
There are a lot of real estate agents who are making short sales the focus of their business. Some would say they are overworked and underpaid.
Though, if you ask them, they will say at least they are getting paid !!
James ,
I have worked with clients to help them get through the short sale process. It doesnt pay directly. Though,I have had them refer me other business.
Barbara - that is a great commitment to your business and building your reputation.
People will tell friends, family, co-workers etc... how hard you are working for them and you may not even earn a commission. The can imagine how hard you will work for buyers, etc... Good Work!
James - I hear you - short sales can "suck" sometimes. We have done our share and have committed to doing them for clients and referrals. Every one that we made a commitment to work on has gone through to settlement albeit a lot of work. We are currently trying to do 2 as we speak which are very tricky so maybe our 100 percent ratio so far is at risk !!! : )
Now we have only been on the listing side and not on the purchase side. I would be more nervous being a buyers agent due to the added risk involved of the deal blowing up. The sellers we have represented were overjoyed that we helped them get out of a painful experience. So that is something to remember when you have the opportunity to help and represent a client.
Chris & Stephanie - glad to know they have been successful for you. There are definitely agents who have been making money and building their business.
Short sales are most challenging for buyers as they never know where they stand with offers
I think the reason a lot of short sales fall apart is because of the agent involved. Many agents don't know what they're doing and don't have a completed short sale package to submit to the banks. The banks aren't even going to look at a package unless it's completed correctly when they receive it. A little education about the short sale process would go a long way toward helping the agents get the sales pushed through.
Agreed, short sales suck. Most still being occupied latent defects are more possble than a vacant home. There is no seller money for repairs or cleaning up after leaving.
James: Short Sales are not for everyone.. It takes the right buyer for the right property. Some can be great deals...some won't be.
Seems like everyone likes short sales, lol. Too bad they are going to be a fact of life for a long, long time.