St George Utah Short Sales

 

St George Utah Short Sales are risky business! I advise against them and do not like showing them because I've learned that there is little chance of them ever going through. Of the ones that do get done (my guess is 60% actually sell, as apposed to going into foreclosure or something else, in talking to a few short sale realtors) learn the shocking truth about how long Short Sales take to get accepted.

 

The key is to bide the amount of time they actually take. My experience has been, the buyer came to town serious about buying and 'like a bug to the zapping night-light' you go. About 50% of the first offers end up dropping off the band wagon buying something else, is a guess, one realtor reports, in having done about 20 Short Sales now.

 

However, I am recognizing that a few Short Sales actually do go through, although against the rest of what actually does vs. the ratio of Short Sales on the market- it is not saying too much, if anything at all. If you want to rally through some of the numbers though, go here- St George Ut Real Estate.

 

Also, I've included an email I wrote a buyer, St George Short Sale Letter, regarding what chances really are/might be, for you on the ground, if you consider St George Short Sales.

 

Some realtors now are excluding ready information in the listings revealing that it is a Short Sale. Call me to find out for sure or to configure listings manually where I can check a box and you can't- NO SHORT SALES.

 

ST GEORGE AREA SHORT SALES - For the complete quick version just read the bolded green below. For good advice read the orange below. For wise solutions to navigate the short sales see the blue.

 

Advice:

The best thing I can tell you is stay clear.  The next best thing is have me call on each one you might wonder about because only some are worth going after if they have an indication of being able to have a relationship with the bank and a real seller.  The third best thing I can tell you is that if you do put an offer on one, a Short Sale addendum with Short Sale Disclosure allows you to not have a binding contract with NO earnest money required, such that you can continue to shop other homes and withdraw your offer anytime. This is basically tit for tat- they have a loose association to you, so in return you have a loose association with them OR in lieu of them not responding to you, you were able to go on somewhat with your life too.

 

I do not know the actual numbers, but one short sale specialist told me that about one out of four of his Short Sales, actually sell, rather than going into foreclosure. Put on top of that, that more offers can collect on top of yours and your odds are pretty slim of every 'cashing-in' on a Short Sale. Also, an appraisal is eventually ordered and people have to eventually adjust offers up close to that. Why waste your time?

 

Short Sale Solutions

1. Call me, Brian, and ask for listings without Short Sales- I can configure them on the back end and email them to you, when the mls disallows it to all public search solutions that I know of; there is no other way. Then you can also have me put you on email updates for the same to get new listings as they come onto the market without the Short Sales mixed in.
2. If you give into the the light 'like a moth to the flame' I do have a good couple bits of wisdom: One, don't make it your staple diet. In other words, look at a couple short sales, but have your mainstaple diet be other valid listings you are looking at and have short sales on the side. Second, take the 'several' approach. Play the odds in your favor. Don't just put one offer on one short sale, do three or four; then you might actually have a 60% to 80% chance!

 

Basic Short Sale Education

 

Short Sales are when the seller owes more than the home is worth and is in default of paying his/her/their mortgage payments for a period of time and has or will be submitting a short sale packet, to include a ‘hardship letter’ to the bank.

 

SHORT SALE DEFINED. The term “Short Sale” is used in the real estate business to describe a situation where the current fair market value of the property is less than the debt owing against the property. In other words, the Seller can’t sell the property unless
the creditors (“Third Parties”) agree to accept a payment that is less than (or “short” of) the amounts actually owed to those Third Parties. The Third Parties may include mortgage lenders, mortgage insurers, bankruptcy trustees, and federal, state and local taxing authorities (such as the IRS or State Tax Commission) or other lien holders. The state of Utah has come up with some more Utah Short Sale Disclosure information conveyed in and relayed regarding any offer you put on a short sale property.

 

Also, normally the bank has agreed or at least it is acknowledged that the seller will not be able to bring proceeds equal to paying off their mortgage(s) and liens involving the home. However, this should not always be just assumed like it generally can be by various degrees, by the seller/owner in the home and his/her realtor. For example, let's say there are a first and a second mortgage on the home. Sometimes the seller will have spoken and received agreement with one lien holder regarding short selling the home, but is or has not been in as much communication with the second lien holder who usually stands to lose more on the deal.

 

It is principally expressed in a short sale that the seller desires the bank to take the loss and not the current seller of the home. Be aware of such, that when the seller starts marketing the home, he/she/their realtor, will usually market it lower than they otherwise would, to get offers into the door- after all, it will not be their loss. But this does not mean a higher price will not be expected eventually by the bank or 3rd party approvals involved. Not until a long process of already receiving at least one offer on the property, are any of the third parties even becoming interested in selling, after which they may then procure an appraisal on the property. At this time, offers often will have to come up near that, in order for the home to be sold.

 

When an offer comes the bank(s)/lien holders will, at the sole option of the partie(s) involved, give either full or partial 3rd party approval for the sale to take place.  The catch can be that all parties that have an interest or lien on the home, have to agree (sign-off on it) before a sale can take place.  Thus when more than a primary loan or primary lien holder is involved, the process can often be forestalled based on the other lien holder(s) not agreeing to a sale unless they have negotiated a satisfactory amount they settle for.  These second position lien holders are accustomed to losing more than the primary lien holder, but they can negotiate for more [of what is rightfully owed them] at their pleasure. However, they can't be too fussy, because if it goes to foreclosure, they get nothing.

 

The alternative is for the first primary lien holder to force the home to go into foreclosure where upon the home is stripped of all lien holders in an auction of the home going to the highest bidder, or in most cases, the largest stake holder. Subsequently, because the primary lien holder has more at stake and can usually get their money "back out", they then tend to be the highest bidder at auction- as a St George foreclosure or NOW as a genuine "Real Estate Owned" REO bank home.

 

You need to know that Short Sales ARE NOT ANYTHING TO GET TOO EMOTIONALLY ATTACHED TO- we merely play the game with them if you want to put an offer on one and perhaps never hear back. I'm serious, so don't be surprised and keep calling me every day to check on its progress.

 

Buyers need to know that it can be a long time hearing back on a response to your offer and it is a definite "we will call you", not the other way around, even though we may call to tease them every once in a while, maybe once every week or two. 

 

A few important questions exist to ask the listing agent on Short Sales. Other tell tale signs can be ascertained by a good St George Realtor, like myself. One is how far along the road toward better turn-around times we can anticipate in hearing back once an offer is submitted.  Of such questions I like to ask are probably in this order and varies depending on the situation of course:

1. Is there more than one mortgage lien holder?
2. How far along the road are we, has all the short sale paper work been submitted to all the lien holders it applies to? A new development here is that no short sale paper work is submitted to the bank for approval of a Short Sale process, until the first offer is submitted. So, the bank is definitely not "into" it to begin with.
3. Has there been a first offer to “prime the pump” in getting things going or in other words, has a realtor BPO or appraisal by the bank been conducted on the home.
4. What did that come back at?  (Often they don’t let the realtor know, but half the time they do).
5. How good of a communication do you have with the bank, meaning can you talk to them and hear back quickly? (This is often my favorite question and sometimes I will ask it first. Realtors are crazy about sharing common anxt, so cannot do the bold faced lie to each other. Some are real good at side stepping the question though. This tells you a lot sometimes about if real decision makers are engaged and motivated to sell. This is such a basic function regarding being able to put a deal together and I'll bet most just miss it.)
6. And as such, are you usually talking to a loss mitigator now or has one been assigned?
7. What is your pattern of how you submit offers, do you submit them right away or wait and field offers only to submit the higher one or two at a later date?
8. As such do you have a good contact/title person to get the HUD work and package paper work the bank requires with an offer?

On the good side, good responses to these questions leads me as a realtor be OK in supporting some emotional attachment. Let me work to find out though before you start salivating please- it is just not worth it otherwise.

 

Keep in mind however, that these homes can still end up going right to bank auction primarily because the first lien holder often gets their money either way. From various Short Sale realtors I surveyed I'm guessing that about 20% of all Short Sales ever go through. Also, some of them renegotiate better payment terms with the owner in the home and they then cancel the listing and make a go of keeping the home. 

 

If we do get a hold of somebody at the bank, it doesn't mean the decision makers will be engaging. Think about that and realize that often Short Sales are not real motivated sales, except by the Seller who is in them (not the real decision maker in this case) and don't forget the realtor is motivated. The realtor out of his/her greed or duty sets the price lower than normal to get offers in and heighten the chances of an eventual sale with buyers who "fell for it". Also, the buyers interested who can often be multiple buyer offers, they often will hear about it going to auction before their realtors often do, as evidenced by seeing a sign on the place giving notice of such an auction.  It then goes into foreclosure. 

 

Regarding the realtor setting the price lower than usual- it most often is a hook only. As such, you need to know, that once the bank sends out for an estimate of value (typically after the First Offer), either through a Broker Price Opinion (BPO) or an appraisal, then every anxious participator is called at their game to come into better line with reality- the banks reality. Thus, the 'mirage in the desert'. Oh, you get that in their counter offer, typically to the highest and best offer currently on the property. But playing the game typically, might give you better chances at getting a decent deal, but only when and if you can get one to go through.

 

Ok, if you do plan on putting an offer on a Short Sale, you can usually plan on a two month wait to hear back on your offer.  It really varies and almost usually requires a good realtor like myself to get in and make a call and ask the right questions to get a better feel regarding it.

  

Short Sales often end up being frustrating, at very least for the buyers, if not all the realtors involved as well.  BE FOREWARNED.  The good news is that if you do have time on your hands to spare, then you can play the game. A Short-Sale Addendum states that there is no binding contract until you hear back. So, as such, you can shop other properties with no problems and you put NO earnest money down as well, so you are out nothing and you can cancel or rescind your offer anytime.  There is also a drop-dead deadline you put on the Short Sale addendum that can hold some hope you'll get a response hopefully before that time, but don't count on it.  Basically, beyond the deadline that you write into the offer the offer becomes void[able]  or ‘dead as you have wished or wish it to be'.

 

You've been told about them ahead of time.  Now, after that, I'm happy of course to play the Short Sale game with you from an educated basis by calling on each individual one, as on the rare occasion, depending upon that individual one, could pan out and you've picked up an OK deal. I'm imagining however, that more good deals are actually found after foreclosure. Given all that... I've had some I've been able to get accomplished for buyers, which is pretty good to be able to say. Most often realtors compete with other offers, so being cordial and being able to 'butter-up' to the other realtor are helpful skills to help you negotiate being the higher offer. Whether to get help for buying or selling short sales, call Brian- I can help!

If it is in your nature to believe the 'mirage in the desert' or as in a real bargain hunter, realize our current market has plenty of St George Short Sales waiting just for you.