Seriously, these short sales are a real pain in the you-know-what. And why aren’t they called long sales? They are typically the furthest thing from short on any level. If you have ever been so unlucky to be involved in this process you know exactly what I’m talking about. They seem to take forever! Why is that and what can you do about it?
According to the Associated Press, fewer homes entered the national foreclosure process in January 2011 than in any month in more than three years! This decrease is just delaying the inevitable and causing a backlog of homes in the foreclosure/short sale pipeline. In Florida (one of the worst states for foreclosures), foreclosures have to be approved by a judge which has caused many lenders to review thousands of foreclosure cases. Banks have also been letting borrowers stay in their homes longer so they can delay the bad loans on their books. This is mucking up the water.
On a local level, the same holds true. According to SunshineMLS, in January 2011 we had a decrease of 17% in short sales that actually closed, compared to January of last year – that’s significant! Especially, when looking at the entire SW Florida market – we only had a decrease of 2% in total closed sales in 2011, compared to January of 2010. It’s very obvious that closed short sales are not happening nearly as quickly or as often. The proof is in the numbers.
Looking back at 2010, we came out strong in the first part of the year in terms of closings and speed of processing short sales, but towards the last quarter we ran into some problems. Mainly because the banks had missing document issues, wrongful filings, robo-signers, etc., that caused the moratorium on foreclosures. Literally everything was at a standstill. Even though the moratorium has been lifted, that wrench in the process has still caused some lingering effects in today’s market.
How do we overcome this? There are plenty of sellers who need to get their homes sold via a short sale to avoid the negative credit and tax issues of a foreclosure. But the process itself is definitely not doing us any favors. All we can do as a community of Realtors, sellers, and buyers is be patient. Finding a competent Realtor who understands the process and who can guide you through this murky mess will be your biggest step in the right direction. Short sales are getting closed – they are just taking longer, and that will get sorted out eventually. Don’t give up. Eventually all things in life pass and this will to.