“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.