The Housechick Blog

We’ve talked briefly about short sales before.  A short sale is where the Seller isn’t going to make enough money at the sale to pay off all the loans on a property.

If you’re trying to buy a short sale property here in Tucson, be ready to be patient.  There can be lots of hurdles to jump before you can actually close on a short sale. 

If you ever do.

Close, that is.  It doesn’t always happen.  What I’m seeing more and more is that an agent will put a short sale into the MLS at well under market price.  Now, there’s no guarantee that a bank will accept anything remotely near that price.  If we look at the history and see that they’ve tried other prices over time, then maybe we’ve got a chance of getting it at that low price.  But more often than not, what initially looks like a fabulous bargain is just a teaser price.  The bank may never accept a contract anywhere near that list price.  Why should they, if they can just foreclose and then sell closer to market after foreclosing?

The local Tucson MLS system made a rule at the end of July 2007 that short sales must be disclosed in the Agent Only comments of a listing.  Out of curiosity, let’s see how many short sales were disclosed from the start of August to now, and how many of those sold.

In the greater Tucson area, there are 450 properties disclosed as a short sale.  6 are under contract, 81 sold, and 309 either expired or were withdrawn.  There may be some duplicates there, of course, as properties are withdrawn and re-listed, but let’s consider this a ballpark figure, eh?

So: 81 sales out of 81 + 450 + 6 + 309 = 846 possible short sales since August of 2007, when the disclosure rule was created.  That’s roughly a one in ten chance of a short sale actually selling.

Which ought to tell you that sometimes, trying to get a short sale is a massive waste of time.  Like I said, be ready to be patient.  There’s a chance the thing will actually sell, just not a huge one.

Photo via Flickr, courtesy of TT in the Desert