Patience With Short Sales Will Pay Off For Buyers

In Laguna Niguel so far this year there have been 884 home sales of all types (attached and detached). Bank-owned foreclosures have accounted for 16 percent of these sales, short sales accounted for 29 percent and standard equity sales have accounted for 55 percent of sales. As you might expect, there are a larger number of distress sales in lower price ranges and a fewer number in higher price ranges. That makes sense, because those in higher price ranges generally had greater amounts of equity when they were purchased.

Short sales are not easy from a Realtor’s or a buyer’s perspective but they do have rewards for buyers who are patient. It seems like I spend half my time as a Realtor these days explaining to my clients or potential clients all the pitfalls of short sales. Buyers will ask, “Don’t the banks want to get rid if these bad assets? Why do they take so long?” There are so many nuances with short sales it would take a dissertation to explain it but suffice it to say some of the best “deals” are had by patient buyers in short-sale transactions. 

In August, I assisted a cash buyer in making an offer on a short sale that had been on the market for over a year. Buyers had come and gone, and the seller had even tried to sue the bank for letting him have such a bad loan. In the end, as the date of trustee sale loomed, our offer was presented, accepted in a week and closed 14 days later. On the other hand, in June, I assisted another buyer in placing an offer on a short-sale that had been in and out of escrow for over a year. Since the short-sale had been previously approved, we estimated that my buyer could be opening escrow within 30 days.

This week we got formal approval and opened escrow. The time frame of six months was excruciating for my buyers but the value was worth the wait.

Needless to say, if you need to buy and move quickly, short sales are not usually going to be your first choice. But those buyers with time and patience can reap the rewards.