“Buyer gets 50% off short sale listing!”…”Homes in Detroit selling for $1.”
I know some buyers are thinking this will happen here in Salem Oregon as well.
Smack!
That’s the sound of those buyers hitting their heads up against the wall because those stellar deals they read about on Google, aren’t coming to fruition here. Now that’s not to say that there aren’t some really good deals out there… There are, but not like that. Salem Oregon home buyers need to set their expectations. Make no mistake the market will continue to decline here as unemployment rises…but how much? That depends on how well people saved for a a rainy day.
Our Salem Oregon economy is in dire straights right now,and you can’t help but read some articles that talk about those great deals out there on homes. So, once again, it is time to take a look and see if short sales are the end all be all for home buyers.
So…in Salem Oregon 15 short sales have closed so far in 2009, according to the WVMLS. Yes…I am aware that some short sales won’t make it to the MLS, but hey…I can’t track that data. There are 130 active short sales on the MLS right now so we are running about a 11.5% success rate in getting short sales closed here so far this year.
For those of you that think the sky is falling and that short sales are the only game in town, you need to understand that right now in the Salem Oregon real estate market that only 4.1% of total sold homes so far this year have been short sales. 4.1%. That’s it. Small potatoes here folks…so far. Yes, I realize that unemployment is rising and yes…I would expect that number to head up this year. Will we be like parts of Florida where 84% of sold homes are short sales? No. I really don’t need a crystal ball to call that one.
What does this mean? Well if you are a buyer bent on purchasing a short sale home in Salem Oregon…you’ll probably be waiting for a bit. There’s just not a lot to choose from. Oh…and the ones that actually DID close sold for an average of 4.6% off of asking price. Not 30%, not 40%, not 50%….4.6%.
Remember just because you read it on google, doesn’t make it reality. Sometimes the media and reality collide.
On the other hand, buying a short enabled us to put a bunch of money into upgrades that made the house we wanted even nicer. It was certainly worth the long wait we experienced. The only bad part was that it appears that our real estate agent might have been hosed some — apparently the banks were trying to make up their losses out of the agent’s commission, arguing that since they had no contract with the agents they didn’t owe them the usual commissions. I didn’t know anything about this until we were nearly closed, and it bothers me. I assume agents talk to each other and will figure out how to straighten that out. From what I can tell, the listing agent has an ethical, if not a legal, duty to make sure that the buyer’s agent gets the normal commission expected; otherwise, buyer’s agents will steer buyers away from short sales, to the detriment of everyone. The listing agent is the one who accepts the listing and is the only one in a position to negotiate this aspect of the transaction.
Recent buyer you have the right attitude for short sales. There is a commission issue which is why many agents do steer clear of them. Legally the listing agent is required to give the compensation outlined in the MLS, but we do have a clause in our by-laws that essentially states that if the listing agent can’t get the money, they might be off the hook.
Most agents know that short sale commissions can be slashed. If your agent did a good job for you, then tell everyone you know. That will make up any commission losses that the agent incurred.
Great points, thanks for sharing. We are starting to see an increase in short sales in Charleston SC. There are some great opportunities out there for buyers in today’s market. I get calls daily from buyers interested in putting an offer in on a “short sale” property. As a “buyers agent” with experience in short sales, I really explain the process to a buyer and prepare them for a potentially drawn out and frustrating experience. The banks are not giving these homes away. They risk spending money on inspections etc….. to then have the deal fall through at the last minute. If the buyers have the patience and the property really suits their needs then it might make sense to move forward. If the buyer needs to coordinate the closing of the short sale property with the closing of the sale of their current home they could be in for a bumpy ride. The short sale lender does not care if all your belongings are in moving truck and your dogs are in a kennel. A “short sale” situation does not automatically make a property a “great deal”. After you do all of the repairs that may be needed etc…. what have you really gained? There could be a home listed just down the street with realistic sellers who have taken good care of their home that could just as good an opportunity. A buyer should find an experienced “buyer’s agent” that will explore all the options!
Those numbers are surprising! I feel like I have inspected every single one of those homes and a couple of them a few times.
Well that’s because you rock as a home inspector…