According to a recent report by RealtyTrac, short sales accounted for 25 percent of all home sales in the second quarter, an increase from 18 percent the previous year. However, while the number of short sale transactions has increased, and lenders such as Bank of America and Wells Fargo claim to be processing more short sale transactions, the difficulties associated with these types of sales also have increased.
In a recent USA Today news article focusing on short sales, C.A.R. President Beth L. Peerce talks about the repercussions of lengthy short sales. Below are some excerpts from the story.
“We lose buyers constantly because short sales take too long,” says Beth Peerce, president of the California Association of Realtors. Short sales completed in the second quarter took 245 days, on average, RealtyTrac says. In a June survey, 77% of California Realtors called short sales difficult or extremely difficult; 15% said clients were foreclosed on while pursuing short sales.
Short sales — when lenders allow financially strapped borrowers to sell homes for less than their unpaid mortgage — accounted for 12% of home sales nationwide in the second quarter.
In Colorado, short sales were 17% of all sales in the second quarter, up from 10% a year earlier. In California, they made up 25% of sales, vs. 18%.
In the second quarter, short-sale homes sold at a 21% discount to non-foreclosure homes, while bank-owned homes went at a 40% discount, RealtyTrac says.
What buyers should take away from this story, set the purchase price you would like to pay expectations within reason. Also a buyer needs to consider if they can, or even willing, to wait the average 245 days after entering into contact for the property to close? If not, then maybe a bank owner or normal seller owned property is a better fit.
Thank you for reading this post. If I can ever be of help in finding you the perfect property here in the Napa Valley, please email me at Curtis@NapaValleyAddress.com.
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