Do lenders really take it in the shorts on short sales?
While the face of foreclosure is changing, what does this really mean for local buyers and sellers hoping for a short sale here in Salem-Keizer? Are people really getting good deals?
I did a little “mini-study” of successfully negotiated short sales for the past three months. I pulled data from the WVMLS which was designated as a short sale by the listing agent. There were 34 successful short sales negotiated, but I was only able to use 20 for my study since mortgage information online was only available for those homes.
What did I find?
For Salem -Keizer Oregon homes lenders were willing to take a short of 14.8% on average. The average mortgage owed was $185,845 and the amount the home sold for was $158,337.
Is that a great deal? I think it depends on what comparable homes are going for. Just because it is designated as a short sale don’t be fooled into thinking that the property is a good deal. These are two different ideas. Think about it this way…
The Salem Oregon real estate market has declined about 5% in 2008 over 2007. All of these homes were purchased before then. So…that average price of $185,845 is already worth $9,292 less anyway. Then if you consider that most parts of Salem are going for 91-93% of list anyway, then you are almost at that 14.8% off anyway.
$185,845 -9,292-14,124=$162,429.
These short sales were kinda like buying a regular listing with all of the pain involved. Not sure that is such a stellar deal.
It seems that banks are not particularly taking it in the shorts on short sales. At least not here in the Salem-Keizer area. Now that is not to say that won’t change in the future, but if you plan to try and purchase a short sale at 50% off, you can probably plan on being rejected. In the past three months, only one home sold at that 50% off price, and it had mold.
Related posts:
January 28th, 2009 at 7:52 pm
Melina – Love the headline! Your post should certainly open the eyes of any would be Salem-Keizer home buyers. Expecting to low-ball any offers on a short sale home is not a wise move.
Keep those awesome post coming!
Bobby Carroll – Dakno Real Estate Marketing
@rewebcoach
January 28th, 2009 at 8:39 pm
Thanks Bobby…
Trying to set buyer’s expectations right from the get go. All parties will be less frustrated with the process.
February 11th, 2009 at 2:55 pm
[...] all short sales are screaming deals. Good deals…yes…So you need to decide if you have the right temperament to survive the short sale [...]