Short Sales
- A Sign of the Times - Part 2

The Denninger Report  - by Gini Denninger

Our suburban areas also offer short sale properties in all price ranges. One of my clients, Robin, bought a Perinton property in the Blackcross neighborhood for $60,000 less than what other properties in the neighborhood were selling at. The owners had fallen on hard times due to divorce and job loss. They no longer were able to maintain the property, letting repairs pile up. Sales appeal was lost in comparison to what was available in the area, forcing the property to be priced ever lower, in an effort to find a buyer willing to put money into the property to bring it back up to neighborhood standards. Robin has greatly improved the property and if she needed to sell, would have no trouble doing so. These buys are out there, but be warned, difficult to find.

Bob Hibbard, a short sale specialist real estate salesperson in the Rochester area points out short sales have to be priced right to sell. If too high, no offers come in. If too low, the bank might not approve the deal. Some people think “short sale” means fire sale. Not so fast! Hibbard says the average discount for a short sale is between 20-30%. This is proven, by the price paid by my client Robin. She should be able to sell between $170-180,000. Short sales might be priced slightly under current market value, which makes them hard to spot. The owners try to get as much as they can to the property to ensure bank approval of the short sale.

Just because someone is willing to make an offer, there is no guarantee the bank will approve the price for a short sale, for various reasons. An appraisal might show more value to the property in question, despite the fact that it has been on the market for an extended period of time and had multiple price drops before the offer came in. The bank may be willing to wait for a better offer to come along, which does happen, depending on the property and its desirability. Desirable neighborhoods, especially higher end suburban areas usually have smaller discount margins than less appealing neighborhoods.

Short sales are a long process. Buyers have to be willing to wait out the process. Robin put her offer in and had to wait for bank approval. Fortunately for her, a previous buyer had begun the process, but was unable to complete their deal. Robins accepted offer was able to be inserted into that buyers place, shortening the wait time by three months. The average short sale takes between 4-6 months from start to finish. But be warned some take longer, even over a year! If the price is right and a buyer is able to wait they will get a great value for the price.



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