LisaMagness.com

Your True Las Vegas Native

The long story on short sales

Many of us have seen articles about the benefits of short sales and how buyers can save tons of money by buying a bank-owned or foreclosed home. That may be true to an extent, but you rarely see articles that highlight the downside of short sales. However, this article that I have just read in RISMEIDA entitled, “Are banks making short sales a long process?”mention some of the negative aspects of buying short sale homes.

This article mentions that many real estate agents do not want to go anywhere near short sales so as to avoid suffering “brain damage”. I found the term brain damage amusing and at the same time very fitting. I wholeheartedly agree that there are few tortures in this world that are more painful than trying to buy a home from a financial institution. I have seen my share of transactions fail due to the time that it takes to get anywhere with some of these banks. There are numerous things that can go wrong or help to delay the process of short sales such as the bank changing the terms of sale at the last moment, the bank taking upwards of 3 months to reply to an offer, if ever, and of course closing can take up to 6 months!

Dealing with and short sale homes is such a stressful and time consuming process that I would avoid buying a short sale home like the plague. It is definitely a far cry from dealing with a motivated private seller. Another popular misconception is that people will spend less money on a short sale home. According to Frank Nason of Residential Resources, the cost of homes sold through short sales was 18.4% higher than the cost of foreclosure homes.

However, when homeowners consider that their credit record does not suffer as badly if they sell their homes as short sales as opposed to foreclosure; it is easy to see why many US markets are currently being flooded with more short sale homes than foreclosure homes.

I seriously hope that someone in these banking institutions figures out something pretty soon or we are bound to see more agents who will shy away from home sales and markets cannot stabilize until the supply of homes for sale reaches more historic levels.

Thank you,

Lisa L. Magness

Enjoy, and thank you for allowing me to share my thoughts with you. Have a great week!