San Diego Housing Bubble News and Analysis

If you are a buyer I don't think there is much effort involved at all. You need to treat a short sale in a fire and forget manner. That is, submit your offer, then forget about it. The nice thing is you do not have to commit to anything, you do not have any money tied up, and there is not much effort you put into it as a buyer at all.

The quality of the listing agent, as well as the parameters of the short sale itself are what really matter. For instance, there are some short sales that Battiata has listed that I have sent in offers for buyers and it has been very frustrating. Little to no response at all. Long timeframes. Conversely there was a recent short sale that we were involved in with a very very competent agent from Coldwell Banker and he Wells Fargo was the lender and he handled it very well and got it done. In other cases you just get broken hearted. Recently a short sale offer a client had was in decent position but someone else came in all cash and the bank took that offer instead.

On the bank side there can be challenges as well. Obviously 1 loan is easier then two. If there are two and they are both with the same lender then that is better then if there are two and they are with different lenders.

The biggest problem you will run into right now is that most of the properties on the market right now that are short sales have offers already in on them. You need to hope that perhaps the buyer has walked away.

In my book they are worth the trouble but treat them with a sort of hands off attitude, don't fall in love with the property that you have a short sale on and don't get obsessed with it.

bot falling in love with a property is probably good advice for any type of deal.

More on short sales....

There is quite a difference in the way listing agents treat short sales.

Some listing agents will take offers on short sales, pick the highest and/or most likely offer to be accepted by the lender and run with that. Some of these agents may indeed pull the property from ACTIVE status and move it into either WITHDRAWN or PENDING even before they have lender approval. This does not happen alot but a case in point is the property listing on Brome in PQ.

This was a former Battiata listing that languished as ACTIVE on the MLS for 322 days. It had lots of offers but for "whatever" reasons the deal didn't get done. With a new listing agent the property went into pending status in 8 days. Now the property didn't have lender approval in 8 days but the listing agent put it into PENDING status for his own reasons. Perhaps the owners didn't want more showings or perhaps the listing agent was confident enough the offer would be accepted by the lender. Not sure.

***********

Another common thing may be for the listing agent to accept a few offers and again, select the one that he feels is a combination of having the highest likelihood of acceptance and highest offer, and most competent selling (buyers agent) such that that agent and the buyers know the timelines of how long short sales can be. Thus the agent may submit that offer and hold all the other offers and subsequent offers that come in until there is some feedback from the lender. Now when that lender does give feedback, that listing agent may send a counter to ALL offers, that simply say submit your highest and best counter offer. While this is irritating it does filter out buyers who were halfhearted or who may have moved on after not hearing any feedback.

*****

Then in other cases the listing agent may indeed select the best short sale offer. Submit it, commit to it and run with it all the way through to completion. As a buyer this is the best for you because you get that committment that you will not be hopscotched. You may want to have your agent add an addendum to your offer that if your offer is accepted by the seller, and thus sent into the lender for review, that the seller will either move the property into PENDING or WITHDRAWN status OR if it is kept as active, that the seller will only accept backup offers. I will say right off the bat that most sellers will NOT agree to this but you can try it if you like.

In the current market condition though... it is very unlikely they accept those terms unless your offer is very strong. If you are lowballing they will not.

The other realtors here have had lots of short sales experiences as well and can add what they have seen such that it may help people decide if a short sale is worth the time and effort. In my book it is but just know what you are in for.

I have a question about short sales, also...

As I understand it, short sales benefit the seller... they can sell their house for less than they owe, and walk away with a ding to their credit... but free from that debt.

So why would sellers tolerate short sale listings that have limited info? No description, limited pictures. If I were the seller, I'd want my home MARKETED.

Here are two examples I came across today.

http://www.sdlookup.com/MLS-090019304-50...

http://www.sdlookup.com/MLS-090019285-52...

(I suspect it's the same agent, based on the terseness and lack of pictures.)

As far as the benefit to how hard your credit is hit, I cannot make any firm comments. I don't want to make any speculative statements there because honestly, I believe it varies case to case. I will let others more expert on that comment.

As far as how well your listing photographed and shown on the MLS, that is something you have a very firm grip on and should make sure your agent gives you what you expect.

UC the listings you showed are from the same agent who works for Century 21. They are 0 and 1 days old respectively so hopefully the agent will be adding more pictures and descriptions.

Thanks for the input SD Realtor. So the benefit of a short sale for the buyer is that you can get the property below market value?

This guy says,"I'm not going to say it's impossible to get a great bargain on a short sale, but it is highly unlikely."
http://www.searchlightcrusade.net/2008/0...