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How Many Short Sales in Tucson Actually Sell?

March 3, 2008

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there are 450 properties disclosed as a short sale.  6 are under contract, 81 sold, and 309 either expired or were withdrawn.  There may be some duplicates there, of course, as properties are withdrawn and re-listed, but let’s consider this a ballpark figure, eh?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

Other Information That Might Be Helpful

• The Chances A Short Sale Will Actually Sell (May 5, 2008)

  I’ve got a buyer thinking about making an offer on a short sale property.
  Remember, a short sale is where the owner owes more on the house than they can sell it for.  They’re most often incredibly long, frustrating sales, and often, the sales never actually complete.  You have to get the lender to agree to [...]

• Comparing the Short Sale and Foreclosure Markets (April 3, 2009)

  Fun with numbers -
  # Short Sale Homes on the Market today: 1820
  # Short Sale Homes Sold in March: 143
  That’s a 12.7 month supply of short sales in Tucson.  Which means about 1 of every 13 short sales actually sell.
   
  # Foreclosed Homes in the Market today: 1614
  # Foreclosed Homes Sold in March: 417
  That’s a 3.9 [...]

• Proposed Rule Change for Short Sales in the Tucson MLS (December 20, 2008)

  Landed in my inbox today, a proposed rule change, if I understand the message correctly:
  MLS Rule Change for Short Sales
  Section 3.18- Short Sales:
  As used in these rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; [...]

• New Rule about Short Sale Disclosures in the Tucson MLS (June 28, 2009)

  News from the Tucson MLS regarding Short Sales today.
  The notice, in its entirety:
  After reviewing changes implemented by the National Association of REALTORS®, the MLS Board has implemented the following Short Sale rule, effective immediately.
  As used in these rules, short sales are defined as a transaction where title transfers; where [...]

• Buying Short Sales and Foreclosed Homes in Tucson (April 1, 2009)

  Been discussing this quite a bit recently with my home buyers.  Two very different situations if you’re trying to buy short sales and foreclosed houses in Tucson.
  A foreclosed home - also called bank owned or an REO property - is one where the lender has completed the foreclosure process and now has taken it back [...]

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