Short sales and pre-foreclosures have gone up by over 10% over the last year. Short sales are becoming more and more common, while foreclosures and REOs, although still extremely common, are on the down trend.
For Short Sale Sellers
The fact that short sales have gotten so common in the Phoenix Metro has both its pros and cons.
On the upside, lending and real estate professionals have gotten more used to seeing these short sales. That means you’re much more likely to find someone who can answer all your questions and guide you through the process with professionalism and expertise.
The downside is that banks are swamped with contracts to review. This means getting an answer about your short sale – even if the answer is “no” – can take weeks, even months.
The best thing you can do to speed up the process is to dot your Is and cross your Ts. Make sure you have all the complete paperwork and documentation. Keep paying all your bills – if you should default on your bills, these could become property liens which would make the short sale that much harder to complete. Make sure you talk to qualified specialists, who can help you with the short sale process.
For Short Sale Buyers
Just as in selling a short sale, buying a short sale in this marketplace has its advantages and disadvantages.
Buying a short sale can be a frustrating process, especially in this market. Not only are banks swamped with contracts – But they have no real incentive to hurry the process along. They don’t actually own the property yet and it isn’t considered a toxic asset they need to get rid of (like a foreclosure.) The longer they let an offer sit, the more likely another higher offer is to come along. In other words, some might say that banks statistically make more money from taking a long time in accepting an offer than from quickly completing a short sale.
Despite the fact that short sales often take forever to complete, sale rates have gone up from last year. Last year, 69% of properties listed were removed without being sold. This year, that number has gone down to 50%. If you’re going to purchase a short sale, expect to wait. You can expect to save mid to high five figures off the purchase price and many buyers find the wait time and the added complexities well worth the money.
The best way to navigate the complexities of a short sale is to have the guidance of someone who’s been through the process multiple times. There are often unforeseen hitches that can come up – like the bank not providing the final contract even after the agreement has been reached, what to do if the seller has PMI and many other potential complications.
In addition to being able to guide you through the process, a qualified real estate professional will also be able to direct you to other key people you may need to know in the process: Accountants, inspectors and lawyers.
Call one of our short sale experts at (480) 331-2832
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