This article rings especially true in today's market. I am seeing more and more delays in short sale transactions and then falling through. This frustrates not just first time homebuyers but anyone really looking to move.
As much as I can, I try to steer clear of these transactions to best assist my buyers. Short sales (ironic name) can be a very lengthy process. I've been under contract with 3 for over 3 months without a response from the bank. This can be frustrating to not just the buyers, but the agents and sellers as well.
Short sales lose appeal among first-time buyers
WASHINGTON – Sept. 29, 2011 – Short sale transactions are becoming less popular among first-time homebuyers. Buying a home in a short sale transaction may offer a huge bargain – sale prices average 27 percent lower than non-distressed properties – but more first-time home buyers say the processing delays aren’t worth the trouble.
First-time buyers’ share of all short sales dropped to 39.7 percent of transactions in August – a three-month drop and the lowest share ever recorded for first-time homebuyers, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In November 2009, first-time homebuyers’ share of short sales reached a peak of 54.1 percent of all short sale transactions.
With bargain deals, why are short sales losing their appeal?
Buyers complain that short sale transactions take too long to close, with approval times often taking several months after a buyer submits an offer. Some buyers, frustrated at the delays, place offers on multiple properties with plans to close on whichever one is approved fastest.
The average time on market for short sales is 16.6 weeks, and the majority of that time is spent waiting for short sale approval, the HousingPulse Tracking Survey found.
Source: “First-Time Buyers Losing Interest in Short Sales,” RISMedia (Sept. 26, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD