Is It Time To Buy A Short Sale?

Although 2/3 of the homes sold in Phoenix and the surrounding suburbs are REO’s, only about 15% of the inventory of available homes are REO’s. But short sale listings are abundant – 11 months of inventory! But many buyers – and real estate agents – avoided short sales and for good reason.

Last month, 35% of short sale listings ended up selling and this month that number is up to 41%. And there are signs that trend may continue. Banks are more likely now to consider a short sale as it oftens is a better financial option for them. With incentives recently added to the Making Home Affordable program to encourage banks to work with distressed borrowers and negotiate short sales when they can’t qualify for loan modifications, the process will hopefully become less painful and more streamlined.

Short sales are difficult transactions. Depending on which lender has final approval on the short sale, bank review of the terms can take several months, and there is no guarantee that the bank will accept the offer in the end. But some real estate agents recognize that short sales are going to be around for awhile and are taking steps to educate themselves on the process and work diligently to negotiate these deals. It is one more vital step in cleaning up the market and connecting buyers to homes.