Short Sale ~ The oxymoron of the century

I want to add my 2 cents to all the short sale nonsense.  A recent post by Heather Barr, (another great Phoenix area blogger by the way) hit the nail on the head as far as the misconception of the “Short Sale Deal”.shrimp1

I’d like to cast my vote for the best oxymoron since Jumbo Shrimp.  The real estate term “Short Sale” which I’d never heard of until just a couple years ago.  Short sales are neither “short” and often don’t result in a “sale”. 

I’ve taken fewer and fewer questions about “what is a short sale” as the general public are becoming more familiar with the term.  A short sale, which is defined as “The sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Some lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments.”

Short Sales have become the bane of our real estate market.  Every Real Estate Agent I know has a horror story that goes along with their first (and usually last) short sale transaction.

I receive calls almost daily from buyers who are interested in purchasing a short sale.  My first question to these callers is “why?”   Who wants to shop for homes that are listed at ridiculous and unrealistically low prices that no bank is going to accept in the first place.  Take the time to write an offer.  Submit the offer and wait 4-6 months only to find out the bank rejected your offer and the home is being foreclosed. Not a good use of my time…and certainly a waste of a buyer’s emotional energy.

What most Realtors really want to know is when are short sales going away?  They’re just sitting around cluttering up our market. What’s it going to take?  Why don’t banks just skip to the chase and foreclose when they know they’re going to more than likely do it anyway?  Don’t get me wrong…my heart breaks for those sellers who find themselves in the position of no longer being able to afford their monthly payment.  But these seller’s are being drug through the wringer as well, hoping against hope the short sale will magically materialize.  

I vote for changing the terminology at the very least.  Let’s not sugar coat reality with a cutesy name like “short sale”.  Let’s get real and call them what they really are.  I vote for “Energy-sucking transactions from hell that are a total waste of everyone’s time”.  Yea…that pretty much covers it.

Comments

  1. Amy,

    First off, short sales are part of the real estate market just like REOs. The problem with short sales are agents that are handling them usually don’t know what they are doing and they list them at ridiculous prices. To me that is the biggest problem when it comes to short sales, lack of education by the real estate agents.

    The second point, short sales are difficult to close but can be closed within 60 days if they are handled by an experienced agent. I have had numerous closings in regards to short sales as the listing agent and the buyer’s agent. I do agree that all transactions don’t close but you increase the chances when they are handled by a listing agent that has experience with short sales.

  2. Hi Amy,
    Thanks for the shoutout. I just saw the pingback in my blog stats and had to venture over to see ya.

    Thank goodness, short sales are almost gone from our landscape now (late Dec 2008). I’ve been counseling prospective buyers to consider avoiding them since mid-year. Most do, thank goodness.

    Tony’s point is valid – they CAN work. But they too frequently don’t. If the listing agent can’t answer my few basic questions about the deal (have you talked w/ lender, how many loans, how many successful short sales have you closed?), then I’m outta there!

  3. Hey Tony & Heather,
    Yep, we all agree, short sales can work, but the key is the listing agent. So many of them have simply jumped on the band wagon and don’t have a clue. Many do not return calls and it’s a total exercise in futility for buyers and their agents.

    My buyers have thankfully shown little interest in getting involved in a short sale purchase and I too, am thankful that the short sale property inventory is diminishing. Can’t go away soon enough for me!