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Are Short Sales Fake Listings?  Part 1

Are Short Sales Fake Listings?  Part 2

Part 3 of our series “Are Short Sales Fake Listings” deals with the problems that buyers encounter because short sales are fake listings and the steps that buyers can take to find listings that are not short sales.

How This Works Out for Buyers

Buyers often feel like they should spend some time looking at Short Sales.  They’re often tempted by the low prices into ignoring the fact that these listings hardly ever close successfully.  Sometimes buyers hear about the long closing time (3 months and more to get the offer accepted in many cases, plus another month to close) and feel that they may not be in such a hurry so the long time frame may work.

What buyers often don’t realize, however, is that there’s a big difference between waiting three months for something good to happen that you know is coming, and waiting three months while having no earthly idea of what’s going on with your offer.

So what happens?

Rarely, the best case happens, and a buyer who was interested in a short sale gets their offer approved by the lender and is still interested in the property when it’s ready to close four months later.   Unfortunately this intermittent reinforcement leads more buyers and sellers to hope that maybe they’ll be the next American Idol winner.  (Intermittent reinforcement is also the principle behind the lottery and Russian roulette).

The most common case is one we see happen time and time and time again.  The buyers who were excited about their offer and thought that they’d be happy to wait end up frustrated as can be, while the unresponsive lender drags his feet for months and months.  Most people overestimate their own patience because they haven’t met loan workout managers, who are the undisputed masters at testing peoples’ patience.

In the worst case, as we point out above, the buyers wait patiently as detailed above.  Finally, their offer approved, they go through the inspection process and get their loan ready, but then the lender pulls the rug out at the last minute.  So these buyers – who’ve told their landlords they’re leaving — find their patience rewarded by being out of pocket by about $800 or $900 for inspections and appraisals.  All dressed up with no place to go.

How Can Buyers Get Listings That Don’t Have Short Sales?

Most real estate web sites are fed by the Multiple Listing Service, or MLS.  Unfortunately, web site providers don’t always give us the option of weeding out the short sales from the general listings.

Here, however, are three ways that you can filter out the short sales and only get the real listings, those that have a good chance of closing in the face of a reasonable offer.

1. Use our foreclosures only search page
   http://www.sacramento-home.com/foreclosures/
   The properties listed here include only bank owned foreclosures, and not short sales or non-distressed sales.  Bank owned foreclosures are enormously popular, because the low prices are just as real as they are on short sales, but bank foreclosures actually sell and close escrow!  (See the table on page
2. Checking if a listing is a short sale
   Our main search pages do not allow you to exclude Short Sales (unfortunately), but you can test to see if a given listing is a short sale by re-running your search and including only short sales.  The advanced options feature of the search page (see detail, below) allows you to do this.  To search only short sales, check the Short Sale box.  As you can see, you can also do a foreclosures only search here by checking the REO box only.
   
   
3. Ask your agent.
   We’re always happy to do any custom search for you from the MLS, and we can set up you up for custom email updates excluding the short sales (and using almost any other search parameters you can think of).  Just give us a call at (877) 735-5657, and let your agent know that you want to get all the listings (for whatever area, size, etc. you’re interested in) except the short sales.

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