Short Sale Buyers face difficulty closing purchases quickly
I was reading an interesting article posted by RISMedia Inc. today in regards to this very topic. (Yes, I borrowed the title from them).
As the article eludes to, many buyers are finding their dream homes. It just so happens those dream homes happen to be short sales. So, they go through the arduous task of preparing an offer, submitting it to the bank, and waiting. And waiting. And waiting. And, well you get the picture. As you might expect, these buyers get upset at how long it takes the bank. The contact their agent and demand answers not knowing the agent has been demanding information behind the scene from the sellers agent.
Who is to blame? Nobody will provide an updates. Nobody will provide the buyers or their agent with any information. Frustration sets in as many buyers decide perhaps its time to withdraw their offer and move onto another property. Only this time, this property isn’t their dream home. They are settling for a home that is not exactly what they want because somebody won’t provide them any information. Again I ask you. Who is to blame?
The answer is probably the system. As a sellers agent that represents many short sales, I feel the same frustration. I have the same goals as the buyers and the buyers agent. My goal is to get the home sold. If I don’t get the home sold then I have let both my clients and myself down. My goal is to help my client avoid a foreclosure on their record. My goal is to help negotiate a sale with the bank that achieves this end result. My goal is to get the buyers that are patient and want this home into the home. And of course, my goal is to get compensated for all of the hard work I have done. When the stress of a short sale sets in, and buyers withdraw it can be emotionally draining.
The system is tradition. Banks are funneling through millions of files at once. Let me say that one more time. Any given bank doesn’t have a “handful” of short sales. They don’t have hundreds of short sales. The smallest banks and credit unions might have thousands. The medium sized banks might have tens of thousands or even hundreds of thousands. The larger banks have millions and millions. Fannie Mae and Freddie Mac own nearly half of all mortgages in this country. So when Wells Fargo, Chase, Bank of America, National City, and any other large lender has a short sale, they only take care of their files. But nearly all of their files are owned by the aforementioned entities.
I have had weeks on end where I try to get some sort of update from the bank. Some news I can pass along. I am not even necessarily looking for good news, just some news. In a current transaction for example, the bank sent over a letter outlining the terms they would accept based on the current offer. The buyers agent worked with the buyers and they decided the banks terms were acceptable, so they adjusted their offer to be exactly what the bank wanted. At the time of writing this article the bank has had the updated offer for over 2 weeks and has yet to provide me a single update.
The buyers are getting very frustrated and the pattern sets in. Who can blame them? I understand exactly what they are feeling. Every buyer thinks if they can talk with the bank, they can get an answer faster. The problem is, that’s not the case. You can’t bully banks. The federal government recently tried that and it back fired. The banks keep this country afloat whether we like it or not. I know without the consumers they would be nothing. But they have built a society where paying cash is frowned upon. Nearly every person in this country manages their money through a financial institution. The only way to solve it is to live conservatively and pay cash for all of your purchases. Without financing, lenders would lose a small portion of the control they have over us.
Short sales are a great deal. The ones I work with in Utah are excellent values. Banks know what values are and are willing to provide excellent purchases to buyers. But, you must be patient. If you find that perfect home, and if you can get your offer into the bank, you have a very good chance of getting your offer closed. But patience will be required.
The article I mentioned at the beginning of this post speaks about buyers worrying about the tax credit. If you wish to take advantage of the tax credit and you want to buy a short sale, you realistically only have about 2 maybe 3 weeks left in which to write up an offer in hopes of getting it accepted by the deadline (and subsequently closed by the June 30th deadline).
If you see a home you know is a short sale that you want to buy. Contact me, I will help you write up an offer and work with the sellers agent to get your offer accepted as soon as possible.