Short Sales in Columbus 2012

short sales 2012 This is a good news, bad new post.  Back in 2010, I wrote an article called What is a Short Sale? in which I explained short sales and the mystery behind them. Fast forward to 2012 and there have been a lot of changes in the short sale market. After reading an article by Brandon Brittingham, over on The KCM Blog, I thought it would be a good idea to update everyone on short sales.

Good news. More short sale deals are going through.

Bad news. Short sales are still a painful and long waiting game, with lots of them never getting off the ground. Here are some things to consider.

1. Short sales are still taking 60+ day to get approved.

This means that if a Buyer is one of the lucky ones who gets an approval to move forward with buying a short sale the Buyer will be waiting an average of 60 days to get that approval, and even longer depending on the bank. If you don’t have the flexibility to wait 60+ days for approval and then another 30 days to get to closing, a short sale might not be the best option for you. I’ve seen Buyers wait 120 days and never get a single response from the bank, this is one of the major the frustrations right now with banks.

2. Short sales aren’t selling dramatically below market price.

Bank owned properties and short sales are dramatically different. In most cases a short sale property is in much better condition when compared to a bank owned (REO) property. In reality, the banks will have an appraisal or BPO (broker price opinion) done on the property. While they will take the a slight reduction because of the hassle and risk of a short sale, for a Buyer, into consideration when valuating the property, Buyers aren’t going to see a huge price discount. Even an offer 10% below list price, unless it is overpriced, will probably not see any success. Banks will offer a slight discount, but they are too shrewd to give a perfectly fine house away because it is money coming out of their pocket. A Buyer looking for a “steal” might want to consider an REO property.

3. Know what you are getting into ahead of time.

Before I even show a short sale I often do some quick detective work. I will check how many mortgages are on the property, where the seller is in the process, who the listing agent is and if they’ve got professional help to negotiate the short sale. So many short sales don’t go through because there is an unqualified person handling the deal or the odd are against the buyer because of multiple mortgages. Buyers are much more likely to get a short sale closed with one mortgage on the house, versus three mortgages and a tax lien. Knowing some of this ahead of time can set expectations and prepare a Buyer for the reality of whether or not the short sale will probably be successful.Shanna Lafontaine is a Realtor with RE/MAX Affiliates who works Metro Columbus, Dublin, Hilliard, Powell, Worthington, Westerville, Delaware and surrounding Central Ohio areas helping both Buyers and Sellers.

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Shanna Lafontaine, LLC© 
RE/MAX Affiliates Inc. 7239 Sawmill Rd. Ste 210, Dublin, OH 43016

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