We talked to Encompass Realty ® located downtown Chandler, about how real estate short sales are done in today’s market. Manny, from Encompass Realty ® said the process is somewhat simple but frustrating due the response times from the banks.
Manny says the short sales process starts with the homeowner. The homeowner will need supporting documentation to be presented to a bank upon a receipt of a purchase offer from a buyer. You must have a complete short sale package to be successful but more importunately you need patience. A short sale from beginning to end will take up to 30 days to 6 months. So why would anyone wait for approval for a short sale when there is so many REO’s on the market?
We recently visited ReconTrust website and got some information regarding foreclosure sale data from May 1st to May 9th which is about 7 days of data. According to ReconTrust there were 135 properties that went to auction and 95% or 128 properties when back to the bank and will in sometime be REO property for sale.
ReconTrust is just one company or trustee in Arizona that process the auctions for the beneficiaries (banks). So if there are about 5 top volume trustees foreclosing about 640 homes going back to the bank every 7 days or about 2,560 homes a month, that’s a lot a home yet to make it to the market. Banks are losing more money when they don’t short sale but ‘investor’ policies are keeping the majority of short sales from even taken place.
On the ARMLS there are about 6,880 single family homes that are REO for sale out of 44,588 residential homes market today. This represents 15% of the homes for sale are owned by the bank but if you combined the properties that went back to the bank in the last 7 days it would be estimated the bank has over 25% of the real estate market for single family homes for sale.
The only reason to do a short sale is if and when you can close from an approved short sale the seller will not have a foreclosure on their credit.