Short Sales improve at a “snail’s pace”
By Marilyn Kalfus
Original Post Date: May 18, 2010
More real estate agents are learning to transact short sales, and more homes are selling that way — for less than what’s owed on the mortgage, as long as the lender approves — instead of going into foreclosure.
But a real estate agent who regularly focuses on the big picture in Orange County says it’s not looking good. There’s improvement in moving short sales, he says, but it’s happening at “a snail’s pace.”
Steve Thomas of Altera Real Estate, who does a bi-weekly analysis of the Orange County housing market, writes:
“There is nothing more frustrating than short sales in today’s market. The name should be changed to ‘uncertain’ sales and there is nothing ’short’ about short sales.
“Some short sales are grossly underpriced and receive multiple offers above the list price. Yet, the final agreed upon price may still be too low, jeopardizing the lender’s approval of a short sale.
“In a short sale, there are three approvals that need to take place. First, the buyer must qualify to purchase the home. Second, the seller must have a true hardship, no money secretly tucked away, in order to qualify for a short sale. Last, the home must appraise for close to the agreed upon price between the buyer and the seller.
“A lender is not in a rush to accept a short sale payoff where the home is selling for $25,000 below the real market price. There are so many obstacles to putting a short sale together, it will make your head spin. Outstanding homeowner association dues, outstanding property tax payments, collection agencies, attorneys, first trust deed holders, second trust deed holders, all potentially stand in the way to closing a short sale.”
He says as of last week there were 4,311 short sales pending — 57% of all pending sales in Orange County. But only 627 short sales closed last month.
At that rate, he says, it will take some 7 months to deplete the pending short sales, and there are an additional 2,415 short sales listed.