Central Florida Short Sales: What percentage of Short Sales close?

Reserved for TLW

BB, I think that if you included your own transactions that the buyers walked out on and you had to get a new buyer in the number of failed transactions, even though you picked up another buyer and EVENTUALLY CLOSED on the sale of that particular property, then even your very successful 90% figure might drop a tad.  Right?

Broker Bryant, 

Yes, it does depend on who is representing the sellers and how much experience they have.  Well said, and I appreciate the general ballpark number.  

I'm curious to actual determine the number of house sold overall.  We have many more expired's and withdrawn's every month than actual sales.  Obviously some churn through many many agents, and some never sell.  

All the best, Michelle

Lol...

I was all ready to come in here and let you have it for not parking me :)

TLW...ROAR!

Bryant...All of my short sale listings actually close eventually, maybe not the first buyer or even the second offer...but if it is listed as a short sale someone other than the seller I listed it for eventually owns it.

Not sure if I can speak here or is this spot reserved for TLW too lol?  I am still confused about short sales because it is all so foreign to me.  When I first joined AR two years ago I had no idea what they were because there they were, everywhere.

I learned fast.  We don't have them here in Canada.  If a house goes Power of Sale (foreclosure) the Lending Institution takes over the property, lists with an Agent who has to try to get fair market value.  It is sold as is with no warranty's etc. and the previous owner has the opportunity to redeem the outstanding amount owing up until the date of closing.

But I have never see that happen.  By the time they are gone there is no equity left, similar obviously to short sales.

What I don't understand is why the process takes so long to close a short sale?  I'm sure buyers must get frustrated not knowing if they are getting the house or not?

Do you feel that lending institutions should be in the real estate business??  Personally I don't.  Do they understand real estate?  The problem I find is that you as an agent if the front man, doing the face to face business with the buyers. 

To the lenders the buyers are just a number on a piece of paper.  Are the sellers still involved with the offer negotiations of a short sale or not?  I'm assuming they are no longer living in the house when it goes on the market as a short sale?

Sorry to be so long in mouth here but I guess I still don't understand the process. 

Kent. Thats the point of the post. As a listing broker I see a short sale as a porperty. Buyer agents see the short sale as a transaction. My properties close. Even though it may take 5 transactions. So for me I got the job done. Make sense?

So the true test would be what percentage of properties placed on the market as a short sale get closed.

Oh, one other thing I forgot.  As REALTORS we have access to the land registry so we know when a property has changed hands.  All sales are recorded even if sold privately so we have a better understanding of what has sold in a neighborhood when we are doing a market evaluation.

Are those facts and figures available to you?  You would be able to know if a property has actually closed and for how much.

BB, too bad you couldn't get those number compiled as they would have been interesting. Your ratio on closed short sales is fabulous and a seller would do themselves proud to have your team behind them. Experience does make a difference.

Short sales are still a mystery to me.  I leave those to the experts like yourself :o)!  Perhaps someday I will take the time to learn about them, but I am just getting my feet wet with regular listings!  Great information though!

I am VERY interested to see what you and other agents have to say. My BofA buddy says that over 90% of all short sale applications are denied....obviously this includes the crummy offers turned in over the past two years. It also includes sellers who asked for a short sale but were turned down because their finances didn't warrant it, it was a second home, etc. As more listing agents become better at qualifying their clients, the numbers should go up for listed properties. But the total number is so fuzzy, as you say, because of canceled and expired listings.

PLEASE publish info that you get....this is so interesting!

BB, I thought that's how you were counting your numbers - just wanted clarification.  And I probably close about 90% of my short sale listings too!  Of course, using some of the stuff I've learned about and advice I've gotten on ShortSaleSuperStars.com!  ;-)

BB,

Blessed or extra talented? Obviously I AM both because I too have a great ratio. I did have buyers I represented back out after 5 months but that has been my only non-closing.

From a buyer's perspective, the most important question is whether or not the short sale is going to close on a house they are interested in.  In other words, will the transaction close for the buyer?  What are the odds that a buyer's offer will get accepted by the seller and get approved by the lender?

From a seller's perspective, the most important question may be what percentage of listings get closed by the listing agent.  Secondarily for a seller would be what percentage of short sales are approved by their particular lender(s). 

If a listing agent is prequalifying the listing, then, of course, the agent's results will be high.  If an agent discovers that a property won't sell short, then he won't take it.  Proper evaluation of the property and owners is a big part of it.  So, if a great agent does not take on a listing, what percentage of those properties get listed by other agents, only to end up as REOs?

I am EXTREMELY careful when I show buyers short sale transactions and look at the list agents closing stats.  Some people take any listing to put a sign in the yard, gather inventory like it is a collection and then are unable to close the transaction because all they want are buyers and the inventory like it is a game.  You are correct - some of the best have EXTREMELY high close ratios like yours.  I bet even on the 10% that you aren't closing that you are getting approvals on probably 8% but the terms and conditions are not acceptable to the seller and it is impossible for them to move foward!

Great comments. I will spend some time this week and see if I can up with a definitive answer.

Renee brings up a good point too. How many short sales are approved where the seller does not accept the terms or can't accept the terms. I have 2 right now that may go that way. One the seller needs to bring $3,500 to closing and there is no way he can get it. The deal is for only $60,000 so there is not enough money on the table to make it work. He may be foreclosed on.

I have another where the seller needs $22,000 to close because of delinquent HOA fees. The short sale is approved but again the seller may be foreclosed on.

We just can't help everyone.

So yes there is a percentage of deals that get foreclosed on even though the short sale was approved.

BB, those are some pretty impressive figures you have going on there. I wish that the MLS would make stats easier to do, real stats that is.

Bob. I think if the buyer is willing to wait through the process AND the listing agent has experience and negotiated a strong contract with a fair price then odds are very high the deal will close. I believe lenders do want to do short sales BUT it has to make sense. The price has to be right.

Jenny. I certainly agree with you that lenders should not be in the business of selling real estate. But they are and it is very frustrating. We are used to working together to get a transaction closed. The lenders are adversarial and make straight forward tranmsacti0ons very complicated.

Your 90% I think is correct for those with the talent and the experience,as well as patience. The ones taht don't close I find are ones where the sleers are not willing to take care of negotiated settlements on items like credit cards that attach to the house. Discover Card is the worst. Soemtimes divorce attorneys can be vindicative when they aren't paid. Even though they know that the house is lost, they can be impossible. BOA and the other lenders are ususally easier to deal with despite the bureaucracy. It may take awhile but i know we'll get there.  

If you go straight by MLS stats and simply pull the number of short sales during a period that sold versus those that expired or got withdrawn, the percentage is really about 10%.  Pretty sad.  I've analyzed those numbers several times using the MFRMLS data and that is about the number. 

But yes if you are an experienced short sale Realtor and screen out the transactions that have multiple liens in place, that aren't desirable properties, or that have uncooperative sellers, then you can get your closing percentage way up there in the 80%-90% range. 

Given the attitude of the banks I find it hard to believe a 90% short sale closing percentage(No offense).

That is unless part of your screening process is to identify lender(s) you've worked with in the past that is automatically amenable to your short sale offers forsaking all others??...then I could buy it.

Hi Bryant, your post is so important as we're constantly hearing that Short Sales don't close and this simply is not the case if Sellers hire qualified Realtors to get the job done; like you, I too have a very high closing ratio of about 96%/97%. This is because I have chosen to educate myself and do all that I can to make sure my Sellers avoid foreclosure by getting their Short Sale to closing. It is so much more than just listing the property and hoping it sells. If you're not willing to go the distance in a Short Sale you are doing your Sellers a huge disservice, in fact, your ethics are in question in my opinion.

90% of the short sales that experienced agents list will sell, because they won't take it unless they know it will close.

 

20-25% of short sales close with inexperienced agents because they just list whatever, with 50% loss, no true hardship etc etc.

 

You are correct, both stats are accurate.

Very, very interesting!   I truly think it is around 20%, they just seem so difficult!

Rob..10%? But the problem with the way you did is do you know how many of those expired and withdrawn listings were relisted and then sold? Or am I missing something?

Lynn. Your stats are what I'm talking about. Katerina Gassett, Wendy Rulnick. Jeff Payne and most of the other also achieve 90% plus.

I'm at 50% right now.  I've had to deal with some nasty 2nd lien holders who will agree to release the lien in order for the sale to proceed but they either want:

• $$ from the seller that the 1st won't allow regardless of who brings it to the table --OR--
• require the seller to sign a promise to pay to cover the deficiency amount

After a seller consultation with a local attorney who specializes in loan contracts, many of my sellers have been advised to foreclose.  This was to either avoid mortgage fraud, or to avoid owing hundreds of thousands that would be wiped out if a foreclosure were to happen.

I'm sure a lot depends on which State you live in as well, different State, different laws.

All of mine either close, reneg their mortgage terms (...ok...go owner... but they often return unable to meet the new supposedly helpful terms) or eventually foreclose (small percentage with uncooperative or demotivated sellers.)

Looking at our overall market, it is hard to pull stats due to our MLS limiting the areas you can market/disclose short sale in the property description. I would estimate an agreement that while one property may have multiple willing buyers, generally, when lead by an experienced short sale agent, that property will close about 9 outa 10 times. Far from the 20-25% people like to throw out. I mean, if you count the consumer who calls his bank and asks, "Uhhh, whut can AI dew 'bout it?" then that isn't really a qualified short sale attempt and can't be counted in the stats. People legitimately trying and actually hiring a realtor to close their short sale? Numbers are decent.

Oh yes, experience isn't expensive, it's priceless.

Patricia/Seacoast NH

You do know what you're doing!  And your Superstar program is great!  P.S. like your new digs!

I've only had 1 buyer walk- after 9+ months. I prepare buyers they need to wait 3-6 months. I had one other that died when I was on the buyer side- the amount approved caused the seller to come back with a $200K counter.

I had 2 die from the listing side- 1 the seller never coughed up the necessary docs and went into foreclosure. The other one didn't have enough time in the redemption period. The buyer's agent knew that was a strong possibility when they wrote the offer, but it was worth a shot.

I don't know how important it is to be an experienced short sale agent as much as just being a knowledgeable, experienced agent in general. My first short sale was no more difficult than one today- I hate them all equally :). Maybe I'm too simplistic about it, but knowing what fair market value is for the house, making sure the buyer is strong and motivated to get that house, prepare both buyer and seller for possible outcomes (may need to cough up money or sign promissory note, etc- buyers prepared for possible counter after waiting 3+ months). Heck- it doesn't even seem that the hardship has to be all that devastating. The bank benefits more from a short sale than letting it go into foreclosure- at least in Michigan where we have a 6 month redemption after the sheriff's sale (12 months if it's on 3+ acres).

I have heard some horror stories here and in the office. Cannot say I will be sorry to see the short sales fade into the sunset at some point. God bless the people that say they love them.

Bryant short sales are not a large part of the loans I do, but I would have to say that more than 70 - 80 percent of them have closed.  The few that have not closed were because they were going on four months and the buyers walked away.

THis is part of the reason I co-list my short sales with an agent in my office.   I market better...he negotiates better.    he has a pretty good track record of getting short sales closed...even if it takes a few buyers!   

I dont do many listings but from from my limited experience and from what I observe, Id say:  They all close. Of course some close at the court house, but they all close.

BB, we also have probably a 90% closing rate on short sales, but we know how to make it happen and also work with the selling agent to educate their buyers.

Good Blog makes you think about the question.  Short Sales take a lot of work and understanding of the process. 

I guess my question is how motivated are the banks going to be to close them over the next 2-3 years. The 1 lender is often not the probelm here, but most loans going short in this area have 2 loans. So how motivated re the second lenders to get some money vs no money, or vs mortgage insurance?

Marcy

Interesting about the comment on the BOA comment. I wonder of the 90% that get denied, is it because of the package, no hardship, etc.  Would be great to know why that percentage is so high according to that BOA rep.

Bryant- We close 99% of our short sales. We have the highest closing ratio in our mls because we don't give up. We also make sure the seller is on board. 

But we also take strategic short sales, we have short sale from attorneys ( their own personal properties) and we also get a good share of realtors who list their own personal properties with us as short sales. We prep our sellers. They know if they have a hardship we can get the deal done without much from them and if they have NO financial hardship they are ready to pitch in for a cash contribution or a promissory note. We like those the best actually because they are very fast to close most of the time. 

We just had the first short sale that we ever had that went to foreclosure before we could close the deal. We could not get an extension and the bank would not postpone the sheriff's sale because our seller disappeared after we tried for 2 years to get it closed. So there was no one to show up at court and he stopped using his attorney, well, actually, his particular attorney took his money and did nothing, so the seller had a trust issue with attorneys. Hind sight is 20./20, we took that listing over 2 years ago and if we knew then what we know now- we would never have taken the listing in the first place. 

Bank of America VP of Loss Mitigation said that they have changed their focus. They want to do short sales instead of REOs during the next couple of years. 

We love BofA short sales, send us all your BofA short sale referrals for Palm Beach County :) 

#26...yea...thats what a short sale is.

I know who I'd be calling. Myself of course!!! ;-). Ok I admit it, you haven't taught me everything you know yet, but I'm getting there.

Bryant... Are you counting the ones that actually get a contract on them or just all that have actually been listed. Would be interesting to see both ways.

Bryant,

As a Canadian I'm having trouble wrapping my head around why Realtors get involved with short sales & Reo's. What Im getting is the banks aren't playing ball at all and it seems extremely frustrating and a tough way to make a dollar. Help me put here; what's the attraction?

BB - I have closed 100 % of my short sale listings.

OK, OK - make that short sale listing - I have only listed one.  :)  Countrywide before BofA and Equator.  9 months.  It was a referral from an AR member.  There were NO experienced short sale agents here at the time to give it to, so I told the seller that I had no experience and took the listing and, "I got by with a little help from my friends."  And 2 attorneys and 1 tax advisor.  At least I knew to do that.

I have only written 1 offer on a short sale, ever - and it was an accident.  When we got the counter back with short sale disclosure, THEN I found out it was a short sale.  We gave it a shot, then bounced because the sellers moved out, turned off the power and water, it was literally drying up after 3 months - you can't do that in the desert weather.  And the listing agent did not know how to do a short sale, she had never even called the bank, said that was "between the sellers and the bank."  :)  The buyers just didn't want the property anymore because of it's deteriated condition.  The listing agent said that it was the bank's responsibility to maintain the property.

We do have a few experienced ss agents here now - I would refer to them and I know the difference between a good experienced ss agent and an agent who will list anything.

 

 

I've closed more than 10 short sale sides in the past 2 years, and I've yet to have any of my SS not close. Thanks for presenting this topic. Good conversation.

90% sounds about right. The few short sales that I lose, I only have the lender to blame and no one else. No matter how committed and patient the buyer is to his offer, you can't expect him to stick it out for more than 3 months, especially if there is no movement at all. Some lenders are indifferent to the plight of buyers especially in today's market when the housing supply is met by an increased buying interest. Buyers will always want a fall back, and when that fall back gets approved first, you let go of the first offer. Then you start over. Unfortunately in some instances, this vicious cycle is repeated several times until, finally, that dreaded foreclosure date comes, and no more extension is granted.   When you are able to close a great majority of your short sales, it's still not easy to see even one fall through.

My closing's run arounmd 90%, and like Renee mentioned sometimes the problem with closing others are the acceptability to sellers of the terms.

I see many times the number of homes that are short sales in escrow than those that close in a month.  It appears that there is a glut of many months of short sales sitting in limbo/escrow.

One way or another all Short Sales close through a sale; however, foreclosure is not the sales homeowners want.  I know - dark humor.

Gaining approval on a short sale before or at the begining of a listing is very important and well done by you (and your team if you have one).  That is good for your sellers, and it is what enables those transactions to close with a sale to a homebuyer instead of the bank.

Aaron

Obviously a great post due to the number of comments. I agree, the statistics for experienced and inexperienced agents vary a LOT! I close them too, but it's not easy.

Hi Bryant, thanks for sharing this post very interesting subject.  I am pretty new to short sales and I am working on my first one now!  So I can't say to much YET!

Thanks

T

My numbers are somewhat  lower. . but I carried  as many as 50 short sales listings at any one time. We lose short sales because the lenders are so behind and don't understand that it takes a special kind of buyer to wait 6 months + for an approval. . .and sometimes, we found that sellers can not live under that stress and  they just move out and become less helpful to close the short sale. I lost at least 3 short sales this year with an APPROVAL ON HAND. . that hurts.

Depending on how you count the statistics, I would guess the number of short sale pendings would have the 20 to 25% close rate as some buyers are impatient and walk.  But, if you consider it from the listing side, than I think you're right and a very high percentage close.

I'd estimate that 90% of short sales that I list close. As you rightly point out, the lower percentage includes buyers that walk, prior brokers, and lots of other stuff.

at times i see a buyer with multiple offers on different shorts. when one or two are finally approved they pick what they like and just walk from the other contract(s). no one holds their (escrow) feet to the fire, so they don't care.

when a lender approves a short they often give me an extremely short time frame to close. i used to process the applicant in full up front but found myself processing the loan 2 to 3 times due to expired docs. also the appraisal isn't done up front and in fla is/can be/is always a problem.

fun, fun, fun.

bottom line.

bring it on, i'm up for it.

Bryant ~ It's a tough one. I went to a seminar last week on www.homerescueinstitute.com

and this company will facilitate the short sale. Have you heard of them?

 

Both buyers and sellers have to be qualified for a short sale to work.  Sellers are part of the team - if they don't cooperate, they shoot the transaction in the foot before it even gets started.  Qualifying sellers is critical.  And of course buyers (and their agents) have to be educated before submitting the offer, in the pitfalls & delays that are likely to occur.

You are SO right !  The percentage that we are personally involved with would be in the 80 to 90 percent range.  In many of those cases, we needed to get several buyers but the deals did close !  With other agents, there percentages will be much lower for sure just not having the experience with these types of deals, on both sides of the transaction.

Just tweeted this post from @phillyrealty

You are so very right, Bryant.  It's not entirely in the agent's or negotiator's hands... if the sellers drag their feet when asked for info, the process can really fall apart.  A listing agent can't exactly make that explanation to a frustrated buyers' agent, due to the listing agent's fiduciary relationship with the seller (in Maryland), but sometimes I just want to shout... "It's not my fault, it's not the bank, it's not the negotiator - we're doing our job the best we can without the seller's cooperation!"

Ah, the difference between Florida and Southeastern Pennsylvania!  Short sales are not the norm here.  And I've had 100% success with mine!

Good perspective. I think realistic expectations about timing is a major make or break point.

I agree with your premise. Experience, either as a listing or buyer agent, involved in short sales is key to success.

I'm around 90-92% myself. It seems the only ones I've lost are either the second lein holder wants an outrageous amount(like 75-80%) or the sellers are asked to sign a promissory note. Sometimes because the property shortsold is not their residence and their residence mtg. is being paid. Sometimes just because the investor is greedy and no matter what, always wants, "a little more"

I think the primary reason why so many don't close is that the listing agent treats it too much like any other normal listing and sometimes they don't take the time to educate themselves thoroughly about the short sale process. I'm working with one now where the listing agent doesn't even know the name of the assigned negotiator.

I think my numbers are a little bit lower but not by much. Now, if you asked how many get approved, I'd say it's closer to 99%. But there are reasons why they don't close, and sometimes those reasons have nothing to do with the seller and everything to do with the buyer. Although I did cancel a listing this year because the bank insisted on a seller contribution, and the seller was unwilling to contribute. This was a seller who at inception of the listing agreed to a contribution. However, I canceled another short sale listing and removed myself from the purchase contract simply because the seller was a crazy person. I never checked back to see if it closed.

I'd say that over the past 3 years, I've had one or two a year go to foreclosure.

I think the market also has an impact. You state you have about 90% of your listings are short. I assume your MLS has large numbers of short sales. In my market the number of short properties listed is under 10% (still a large number but not THAT large). Consequently buyers have lots to choose from and get antsy and move on.

I was apparently wrong in my stats.  The last time I did research on this (probably 6 months ago), the figure of closed short sales was around 10% from what I recall.

I did a search this morning of all the MFRMLS listings that were listed during 2009 and designated short sales. Of those 41833 listings, 12287 are now sold.  That's 29% which is definitely much higher than it was a while back.  I'm pleasently surprised.

You are very right though.  An experienced agent can make the difference between selling the house and not selling the house.

Bryant, so far 5 for 5 have closed for committed clients - I've had one drop out of the process, no fault of the lienholders.  I see marked process improvement with the banks, and so long as we're positioning short sales with the right clients - these usually result in a win/win.  Can't advocate enough to let the title company do your dirty work if at all possible.

Our personal stats are 80 to 90% currently.  We have a couple right now that we just need buyers for.  I agree with Bernadine's comment.  I think obtaining overall MLS stats is inaccurate data because there are so many agents listing short sales that don't know how to properly do a short sale.  It is unfortunate for the everyone involved. 

I find the 25% number to be very low. In the Metro Phoenix area, on average we are closing 50% of all short sales (as a real estate community) and the better agents are closing 90% of thier short sale listings.

Short sales are not about "negotiating", they are about having a good system to follow up with banks, escalate when needed, and having an eganged buyer and seller. 

If an agent doesn't have time to run the process of short sale, they should hire the services if a good agent in thier office that handles a lot of short sales (or even a few, with successful results), or hire a 3rd party outside of thier office if their office doesn't have a good short sale agent (as long as your broker OKs it).

To become an expert in short sales is the same process as becoming an expert in anything: Take a lot of classes, ask a lot of questions, mentor with someone who is successful, and then do it on your own.

In success!

 

Short sales are not a lot of fun. Doesn't matter which side you represent. It sounds like it depends on where you are. I would guess about 40% close here in my market.

I think the lowest percentage of closed short sale transactions I've had in one year was 75%.  That 20-25% is definitely way off.  Once I get a contract to the bank, I've got 100% success getting approval, but between buyers having moved on and forgotten to tell the list side, and sellers who do not like the terms of the approval and decide to let the property go to foreclosure, that's where some don't make it to the settlement table.

One of the problems with our local MLS is that it's hard to determine which properties are short sales. We're working on a field to identify these properties, but it has not yet been implemented.

Personally I have closed over 90 percent of my 50+ short sale listings in the past 4 years.  What I have noted is the listing volume is climbing so it will be interesting to see if there are enough buyers to absorb the volume.

Tom 

 

Bryant: I heard the figure of 70% from the realtor I work with and she is also an expert on these things. Perhaps it varies by market but I agree with you. If the realtor knows what he/she is doing a high percentage should close. Thanks for the post!

I do not know what the percentage is here...But your post is going to make me look and I wanted to claim my spot!

So far I'm batting 1000 because I haven't had one of my short sale listings go to foreclosure...yet! I haven't got them all done...yet. But I will keep working and keep my fingers crossed!

Good point!

Bryant: As those of us who have dealt with multiple short sale transactions know, it depends which banks are involved.  Short sale closing percentage should be a percentage figure provided openly to the public.  Maybe then (after some strong public outrage) banks like BOA and Chase can get their acts together.

I'd love to see both the national and per state averages on 'All' transactions as well as 'Per Bank' transactions.  It would be surprising for the public, but not so much for us Realtors.

Depends on the bank...depends on the buyer...does he stick or do we start over. If we start over can we hold the particular bank off to get the short sale done?

 

"To become an expert in short sales is the same process as becoming an expert in anything: Take a lot of classes, ask a lot of questions, mentor with someone who is successful, and then do it on your own."

You have to start somewhere and study , study,- here in MN we have a different system with our long redeemption period- know your state systems.

 

 

I often get asked that same question, I'm going to do some more research and try to find out the real figures.

Great information with good incite, god job

Bryant, whatever the percentage is, I'll bet it's a lot higher than it was a year ago.  I still haven't done one, but my colleagues who do are having pretty good luck, especially when they line up their ducks with the bank ahead of time.

I would agree that about 20% of short sales actually close as a short sale.  Virtually all of these homes will close, but not necessarily within the short sale process.

Bryant, I think the key is the experienced Short Sale Agent.  If I have a buyer who does not want to buy through me because I am the listing agent, I will refer them to a competent short sale agent who can represent them.

Bryant,

I agree that experience is everything, which is why I refer most of my short sale leads to a well qualified fellow broker, despite my desire to do it all!  It's just vital to have that experience to make sure that you have a well qualified party on both sides of the transaction.

I also agree that it the two statistics are often confused - Closed Short Sale Contracts versus Closed Short Sale Transactions - and that it is important to clarify which you are referring to and also how you came to your numbers/assumptions.

It doesn't seem like Northern Colorado is doing quite as well with our Contract close rate as you are seeing in your area.  I've seen a fairly high number of these (I'd make a very rough guess at >40% or so) drop off the market to reappear as REO's shortly after.  It's amazing how many of these had current contracts in the holding pattern when they foreclosed.

Thanks for the great insight and good post!

Hey BB: As always great question. I have been fortunate (worked my a$$$ off) to get just about all of mine approved. I had one in the last 10 that did not close because the second lender was a jerk and would not negotiate anything. The first foreclosed, the second got a judgement on a coupl in the 70's with cancer and no money, nice guys.

Hey to TLW....

 

Kelly in the KEYS

Bryant - great post here and you are right about the qualifications of the agent and experience re: success with short sales.

There is one other kind of short sale expert that no one is talking about. If we had more buyer's agents who knew the ropes in short sales there may not be as many buyers trying to walk away from deals. If I get a buyer under contract on a short sale you can bet they know the process backwards and forwards. If you don't educate them all you did was waste your time.

An agent friend has a saying I like. All homes will close eventually. Just do your best to make sure your the agent who gets it closed.

Our experience mirrors yours.  Buyers write multiple offers on different properties waiting for the first one to come through with an approval.  Fortunately, we're experienced Short Sale agents and we're selling over 90% of all our short sales.  They do take time but eventually they all close.

Thanks for all your insights into the Short Sale market. 

They are alot easier than 3 years ago and we are alot better at being picky on which ones to accept as listings also :)

I think a better percentage to consider is how many of your short sales do you get approved. The approval is what you're responsible for and is a better measurement for success in short sales. The closing is something that is entirely different and many times out of your hands if you are only representing the seller.

Another difficulty in getting that type of percentage is more of a question of research methods than findings based on facts. Uh??? Forgive me, I'm a clinical psychologist and therefore do a lot of psychological research. One of the worst things you can do in medical research is compare apples to oranges. Ask anyone involved in more than 10 short sale transactions if any of their files were comparable.

So maybe you close a deal with Wells Fargo that was a conventional loan, one lien, HOA past due, Fannie Mae-backed and the offer is 90% of the BPO value. Compare that to the next deal you close with Bank of America whose loan was an ARM, two liens, 2nd mortgage with Wells Fargo, HOA past due, private investor, and a cash offer that is 88% of the BPO value. Each short sale is different and it is unfair to use a closing percentage as a measurement for your success.

Bryant - I agree - if you concentrate on selling short sales, your percentages should be over 90.... If not, look at your seller qualifications (to start).

I wish the buyers agents would explain the short sale process from start to finish with their clients. They all seem to want to walk away from the deal 3 or 4 weeks after putting an offer in. They need to know that not only could it take months, it might be the only chance for the sellers to get out of a full blown foreclosure. They might not have time to get another buyer if the original one walks on them. Please, buyers agents, sit your clients down and tell them everything. It'll make everyones jobs easier!

Lane #23  . . . I COMPLETELY AGREE with you (giggle)

Luck is Laboring Under Correct Knowledge.

Great agents don't take listings they can't sell.

Great short sale agents don't take listings the seller can't qualify to sell, or submit an offer the bank won't approve, or (advise their seller to) accept an offer from a buyer who has no skin in the game.

I agree. Adding to the problem is agents who LIST short sale properties who have no clue what they're doing.

Maybe my response is colored by the day I have had, but which lender you are dealing with plays such a role in the outcome of the transaction.  In the last three days, one approval from Litton Loan servicing, who is fabulous to deal with.  Clear communication, a single negotiator assigned and a quick process.  The packet sent to them on May 27, BPO ordered the 29th, negotiator assigned June 2. . . he called introduced himself, gave all his contact info, reviewed the HUD with me and negotiated changes in one phone call. Revised HUD was sent to the bank on June 3.  Approval letter arrived June 11th. A few clarifications and changes today and we are moving forward to close.

In contrast B of A. . . a nightmare!  Documents were uploaded to Equator March 30, BPO ordered within three weeks, all was looking good.  Negotiator assigned, check. . . Counteroffer on May 10.  Not a bad counter.  A few things we countered back on May 12, and then dead silence and no movement.

Of course we are dealing with Equator, so I tried contacting the negotiator that way, then escalated to a manager.  Phone calls revealed that the negotiator's tasks were way overdue.  We put in an escalation to another manager. Still no communication, there is no ability to get information when I call.  They have given me multiple names of managers with phone numbers and email addresses.  I have contacted each to no avail.  Half of the time when I send an email I get an auto response indicating that the person is out of the office and giving the name of someone else to contact in their absence.  I contact. . . no result. This had been going on for weeks until today when I am sent a letter declining the short sale, but to top it off the letter is BLANK!!!  Unbelievable!  

This was not a low ball, unrealistic offer, nor an uncooperative seller.  We had a fair market offer and a seller who has done absolutely everything asked of her through this whole process.  Three buyers and two years later, this is where we stand.

Sorry BB. . . this turned into a bit of a rant, but I have not lost one yet and this deal is not over as far as I am concerned!

I've lost very few short sales.....mainly the ones where the sellers did not cooperate or tell me their entire story.  I forget once in a while to go three deep and find the whole story.  Lost my first short sale of the year last week.....I knew I had two weeks to put the home under contract and that just wasn't enough time.  I believe 90% of my short sales close as well.

I am thankful and blessed I have only lost 1short sale to foreclosure.  My states are high, and I do a lot for an indivdual agent.  I think the ones who don't close it is because of inexperienced buyers agents. they don't tell teh buyer how long it will really take.

 

I could have signed under every word (and get the points -LOL)

Congratulations on crossing the 700K mark. itis not money, but a good indication of what it takes to be successful

WOW!! Really great responses everyone. Just like I suspected...the folks that do short sales consistantly from the lsiting side close 90%+.

I am going to try and come up with some figures from my MLS. Not quitre sure how I'm going to do it yet but I'll figure it out.

As always I appreciate your participation.

 

I am closing over 90% of my short sales here in Massachusetts.  On occasion the bank will dig in its heels on a higher number than can be obtained.    

BB - I have found that in my market the more short sales became the norm, the more of these transactions closed. I think in the beginning banks were a problem, now reality has forced banks to either approve the short sale or foreclose and it's been proven that there is less to lose with a short sale. 

In our market 40-50% close.  Our closing ratio for "regular" Short Sales is 100%, if we include the Hail Mary's it's at about 93%.