I was at the Industry Partners Conference yesterday (an excellent conference for Realtors, lenders and title folks) and in a round table discussion on short sales and REOs a title guy, Lee Lynch of Empire West Title, mentioned that only 25% to 30% of short sale escrows that are opened, actually end up closing, and short sale escrows can take anywhere from 90 days to 4 months.
It was interesting to find out that title companies use less expensive procedures for short sale escrows since so few close. Title companies only get paid when a transaction closes.
{ 6 comments… read them below or add one }
Susan 09.11.08 at 9:57 am
Too bad that percentage isn’t higher, but it appears that it has increased over this year, don’t you think?
ks 09.11.08 at 1:05 pm
Looks like there might be less need for short sales.
Bloomberg is reporting that senators are asking for there to be a freeze on Fanny and Freddy foreclosures so they can make modifications (i.e. letting the tax payers take a hit on those mortgages). Here is the link:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=asKybf_uOJJQ
If they can slow down foreclosers the housing market will stabalize and zombify.
Check out what is happening when the government took over Indymac. The government is bending over backwards to stop foreclosers. Here is one link:
http://calculatedrisk.blogspot.com/2008/08/indymac-mods-principal-forbearance-vs.html
Once the government takes over enough banks, it is Night Of The Living Dead. (Plenty of houses for sale at a price that few can afford).
Jay Thompson 09.11.08 at 1:20 pm
And I suspect an even lower percentage of short sale listings even make it to escrow…
John Wake - Real Estate 09.11.08 at 3:28 pm
Exactly!
Chris 09.12.08 at 2:28 pm
John,
We just completed a short sale that took more than 90 days and it was the most difficult transaction I have ever been involved in (20+ years). Both agents were beyond inept. They went as far as to allow the buyer pre-possession without having final loan commitment let alone loan docs and didn’t provide the buyer a month-to-month lease (They said that they couldn’t find the seller).
If 75% of the time they are a total waste of time, what does that tell you? Run! These short sales are the biggest waste of time and energy. Good agents should be encouraging their clients to be buying from the excess REO inventory. The banks have to make deals on those homes.
And, if the client doesn’t like what they see, consider a FHA 203k renovation loan to make the home exactly the way you want it.
Nick 10.28.08 at 1:33 pm
We’ve noticed an uptick in the number of escrows that have closed. Right now we are closing about a deal per day.