The greater Cincinnati real estate market continues to feel the impact of “short sales“.
Line up all the “short sales” in a row and while they may look the same….each one has a unique story to tell….based on the lender. And as sellers struggle with what to do with high mortgage payments and lower real estate values, buyers are often caught in the middle of “deals” that seem to take forever. As for the number of residential properties for sale, which require lender aprroval, according to the Multiple Listing Service of Greater Cincinnati – 790 active listings located in Butler, Clermont, Hamilton or Warren Counties. Comparing the number of actives to the number that actually closed during the last 12 months- 773- owners of “short sale properties” are looking at a 12 month supply of properties. Add the somewhat inconsistent handling of “short sales” by some lenders….well it’s no surprise that “short sale” describes underwater sellers and not the time it takes to sell and close a deal when lender approval is required.
During the last 12 months the highest priced “short sale” to close sold for $1,360,000 and the average sale price was $108,512. If you had your property listed as a “short sale” and it sold- chances are the number of days on the market shown below will reinforce what you already experienced with your lender.
|# Days on the Market||# of Listings Sold|
3 “Short Sale” tips for sellers:
- The decision about short sale, foreclosure or bankruptcy should be made by discussing your unique situation with an attorney, financial professional or reputable mortgage counselor. Real Estate agents are none of the above. Our role comes into play by providing you with an accurate view of current sale prices and about how many other homes will be competing for the attention of potential buyers.
- There are no guarantees in the world of “short sales”. The final sale price and the terms/conditions the lender(s) may vary throughout the process.
- Most lenders require extensive paperwork up-front. So be prepared to answer tons of questions and provide lots of documentation. And if you have more than one lender involved- each one will have unique requirements and payoff amounts. In short, just because the primary lender (usually the first mortgage) agrees to a dollar amount ….any sale will also require the other lenders to agree to the sale.
3 “Short Sale” tips for buyers:
- Buyers who make an offer on a property listed as a “short sale” (lender approval of contract is required) should not expect to hear from the seller within a specified time frame….because the seller’s don’t control the lender’s approval process. So if you need a buy a home and move in 35-50 days- short sales may not be the best way to go.
- Usually lenders won’t accept multiple offers. So if you happen to write a contract to purchase and the lender is already reviewing another offer on the same property, the computerized process named “Equator” (used many financial institutions to handle short sales) must process, digest and spit out a response to the offer in front of them….one at a time. If you have time to wait for a process that moves at the speed of a snake digesting a pig-your offer may eventually make its way into the process and be accepted.
- Good communications during the process of buying and closing on a piece of real estate is always critical. Communications while waiting for a response on an offer is the difference between success and frustration. And in many cases your agent may not get any response to requests for status updates. Offers sitting in “equator” have date requirements- but not every deal is sitting in that system and every lender utilizes “Equator” in their unique way. Work with your agent to set realistic expectations.
Patience is a virtue for both buyers and sellers dealing with short sales- so take deep breath and call when you’re ready to start house hunting!