Just yesterday, I decided to check out some stats on the active distressed real estate listings within our local MLS (Multiple Listing Service).
The area searched was approximately 25% of Pinellas County, which is a good representation of the general marketplace.
The initial look at the numbers of sales in each category over the past 90 days was nothing extraordinary.
Foreclosures- 52 sales
Short Sales- 69 sales
However, the truth is evident when you look behind the numbers at the length of time these properties are spending on the market!
Foreclosures- 13 of 52 listings were on the market over 90 days, and only 1 on the market over 1 year.
Short Sales- 53 of 69 listings were on the market over 90 days! Seven listings were on the market for over one year!
Even though the marketing time of short sales is lengthy, the real shock is when looking at active listings- properties currently listed for sale and classified as foreclosure and short sale.
Active Foreclosure listings - 34.
Of these, 9 have been on the market longer than 90 days. The longest DOM (Days on Market) was for ONE listing at 193 days.
Active short sale listings - ARE YOU SITTING DOWN???? 342
That's right, TEN TIMES the number of FORECLOSURES on the market. But, as any infomercial hawker will tell you, WAIT - THERE'S MORE!
Of the 342, 196 of these have been on the market longer than 90 days, and 36 listings have been on the market over one year.
The listing with the longest DOM? 966 days
So, what do YOU think- are SHORT SALES the answer to finding a great deal? These numbers seem to indicate otherwise.
For the latest list of local foreclosures, please visit my website and see the "Foreclosures" page.
http://www.mypinellasparadise.com/
Have a great week!
Showing posts with label foreclosure. Show all posts
Showing posts with label foreclosure. Show all posts
Wednesday, August 12, 2009
Sunday, June 21, 2009
Short Sales, Loan Modifications and Bankruptcies, oh my!
What else could go wrong with a short sale? How about last minute loan modifications?
Example: (Based on a real situation)
Seller lists home with Realtor as a short sale. Buyer puts in and secures a contract to purchase the home through a selling agent. All inspections are done, financing arrangements are made and appraisal is done. Four months into the transaction, it is finally time to close. The morning of closing, the sellers do not show up to sign the documents. Some panic ensues and the seller's Realtor finally reaches the sellers and is told they will not be selling the home since they just worked out a loan modification and will be keeping the house!
What does the buyer lose? Technically they would not lose their earnest money deposit, but would lose any money they paid to secure the mortgage or for independent inspections. The biggest loss of all though, is the loss of the "great deal" the buyers thought they were getting,
as well as the time invested in the transaction. Perhaps moving arrangements had even been made, utilities transferred, boxes packed, etc, etc.
Another event that could trouble a short sale situation is if the seller files for personal bankruptcy. Once the filing is legal, lenders are forced to cease all action until the case is worked out through the bankruptcy proceedings. This is less common than loan modifications, but it can happen.
Both of these scenarios are more likely in the case of an occupied property, specifically OWNER-OCCUPIED.
If you are seriously looking to buy a short sale home, I would suggest eliminating the ones that are still occupied. And of course, as for ANY short sale- prepare to wait.
If you don't want to wait, and possibly miss out on the great deals that are closing every day, start looking at foreclosed homes instead! My website has an updated list of 59 homes in the local area, a third of them in the beach areas of a popular vacation destination!
http://www.mypinellasparadise.com/
Example: (Based on a real situation)
Seller lists home with Realtor as a short sale. Buyer puts in and secures a contract to purchase the home through a selling agent. All inspections are done, financing arrangements are made and appraisal is done. Four months into the transaction, it is finally time to close. The morning of closing, the sellers do not show up to sign the documents. Some panic ensues and the seller's Realtor finally reaches the sellers and is told they will not be selling the home since they just worked out a loan modification and will be keeping the house!
What does the buyer lose? Technically they would not lose their earnest money deposit, but would lose any money they paid to secure the mortgage or for independent inspections. The biggest loss of all though, is the loss of the "great deal" the buyers thought they were getting,
as well as the time invested in the transaction. Perhaps moving arrangements had even been made, utilities transferred, boxes packed, etc, etc.
Another event that could trouble a short sale situation is if the seller files for personal bankruptcy. Once the filing is legal, lenders are forced to cease all action until the case is worked out through the bankruptcy proceedings. This is less common than loan modifications, but it can happen.
Both of these scenarios are more likely in the case of an occupied property, specifically OWNER-OCCUPIED.
If you are seriously looking to buy a short sale home, I would suggest eliminating the ones that are still occupied. And of course, as for ANY short sale- prepare to wait.
If you don't want to wait, and possibly miss out on the great deals that are closing every day, start looking at foreclosed homes instead! My website has an updated list of 59 homes in the local area, a third of them in the beach areas of a popular vacation destination!
http://www.mypinellasparadise.com/
Sunday, June 7, 2009
Foreclosures and Short Sales- Learn the Lingo!
Many prospective real estate buyers are looking for a “deal”. Most of them are speaking of distressed properties; homes that have been through the legal foreclosure process, are bank owned, and/or known as “short sales”.
To become a savvy buyer in this complex market, it’s crucial to distinguish between these terms, and they are quite different. Many buyers interchange the terms “short sale” with “quick sale”, and this couldn’t be farther from the truth.
The majority of short sales are technically “pre-foreclosures”, where the owner usually has a hardship, the mortgage payments are in default, and the lender has started the foreclosure process, sometimes filing a Lis Pendens (public notice of intention to begin formal foreclosure). Many lenders will not pursue a quick foreclosure if there’s a chance the real estate can be sold first, as foreclosure is the most expensive option for a lender.
The length of time a lender may allow a property to be sold as a short sale will vary from a few months to more than a year. The next step for an unsold short sale is foreclosure.
Foreclosure means title has been transferred to the bank holding the defaulted mortgage, through the proper legal channels, and is now owned by the bank as a non-performing asset.
These properties are usually vacant, or, in some cases, the bank allows a tenant to remain in the home until it can be sold.
So, what if you want to buy distressed real estate? Where do you start?
Stay tuned for my next blog. You can also visit my website: www.MyPinellasParadise.com
To become a savvy buyer in this complex market, it’s crucial to distinguish between these terms, and they are quite different. Many buyers interchange the terms “short sale” with “quick sale”, and this couldn’t be farther from the truth.
The majority of short sales are technically “pre-foreclosures”, where the owner usually has a hardship, the mortgage payments are in default, and the lender has started the foreclosure process, sometimes filing a Lis Pendens (public notice of intention to begin formal foreclosure). Many lenders will not pursue a quick foreclosure if there’s a chance the real estate can be sold first, as foreclosure is the most expensive option for a lender.
The length of time a lender may allow a property to be sold as a short sale will vary from a few months to more than a year. The next step for an unsold short sale is foreclosure.
Foreclosure means title has been transferred to the bank holding the defaulted mortgage, through the proper legal channels, and is now owned by the bank as a non-performing asset.
These properties are usually vacant, or, in some cases, the bank allows a tenant to remain in the home until it can be sold.
So, what if you want to buy distressed real estate? Where do you start?
Stay tuned for my next blog. You can also visit my website: www.MyPinellasParadise.com
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