[quote=ybitz]Can you still tour a house and/or make an offer on a short-sale house that is in contingent status? Or is it already too late at that point?
[/quote]
Sort of.
Selling a negative equity property requires the consent of the seller (who has limited incentive to sell) and the bank (who also has limited incentive).
Offering more money will not benefit the seller (they get zero dollars unless the offer is MUCH higher) though it might benefit the agent (many of whom place greater importance upon the size of their commission–which is based on sale price–above the benefit to their client).
Considering the high percentage of closing failure in shorts (like 60%), your best bet is to keep reaching out to the seller’s side and mentioning you are still interested.
One other thing: the final price is decided by the bank. And they don’t negotiate. If the listing agent says “we need an offer for $450,000”, he means it.
Trying to offer at $425,000 will just eliminate your offer from realistic consideration.
[quote=ybitz]
What’s the consensus on buying short sales these days? Too much hassle for the slim chance of getting a good deal, or worth pursuing? [/quote]
In my opinion, its really all of the above.
Most of my practice is short sales.
Right now, I am in escrow for buyers who are getting something that I consider to be at least 10-15% below market. Still, it will mean an extra 3 months of waiting and worrying when its done. By “done” I mean approval from the bank to actually open escrow and do the deal.
[quote=ybitz] Will the new government program for short sale encourage more underwater owners to put their house up for sale?[/quote]
Probably. And it would be a good idea.
Short sales have the potential to be closer to normal sales than bank owned sales do. Therefore, they could help dramatically to normalize the market. If you think about it, short sales could be done with far less waste. The seller could keep making payments, the bank could approve them, the seller wouldn’t trash the house, etc.
A large component of the price drop is the multiplier factor that comes from abandon houses that banks are too busy to deal with and REO agents who gain reps as “slashers”. At an individual level, these factors function within the market. However, at a certain minimum market saturation, they BECOME the market.
My two bits…