“Short” Sales: Anything But

KARE 11’s Rick Kupchella hosted a nice piece on tonight’s 10 p.m. news about “short sales.” (No video link here because I couldn’t get it to work.)

A short sale occurs when the bank(s) agree to reduce the principal that they’re owed so that the owner can take an offer without writing a check for the shortfall.

Kupchella interviewed an Edina agent who reported that the average response time to hear back on short sales, in his capacity as a Buyer’s Rep, was 120 days. His success rate closing short sales? Forty percent.

In other words, 60% of the time, efforts at arranging a short sale fail, and the house presumably advances to foreclosure.

(Incidentally, those statistics echo my own — thankfully — limited experienced; I’m representing a Buyer now who’s at 110 days without a formal response to his offer).

So what do the banks say?

None would appear on camera, or respond to requests for interviews. However, one bank cited a stale press release claiming that the average response time was less than a month.

Not based on what I’ve seen and heard . .

According to Kupchella, the normally cooperative Federal Reserve Bank of Minneapolis would only opine that banks had an obligation to employ enough staff to expeditiously handle such sales.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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