Is now a good time to short sale a home? Episode #209
Todd: Hello! Welcome to Todd Miller TV. Joined here today with Oana and we are gonna talk about short sales.
Todd: So the one thing I hear and the question I get asked all the time is: “Well Todd, they’ve stopped foreclosing, they’ve stopped, so I don’t want to do short sale I’m just gonna live here for free.” And so the question is, Is it still makes sense to short sale or should people just roll the dice and hope they never try to foreclose?
Oana: Well you know, when it comes to rolling the dice, I’ve got a really good analogy for you.
Oana: If you’ve all seen the skyline is Las Vegas, we have these big beautiful Casinos, because people roll the dice.
Oana: They roll the dice, the house wins. In this case, it’s the bank.
Todd: The bank is the house. Okay.
Oana: Okay. So rolling the dice probably is not gonna be a good idea.
Todd: A man that who’s our short sale expert here told me today, it was interesting, she said “It’s great time to do short sales.” And I said ‘Why is that?” And she said “They’re all selling ’cause there’s so little inventory right now.” People, they can’t write offers on REOs, they’re writing offers now on short sales, and the short sales are getting done. So tell me about that, How do you see short sales today versus maybe in a year if a bunch of REO show back up in the market and then the person decides they want to do a shortsale, what could that look like?
Oana: Okay well so, it’s supply and demand. Right now our inventory level is low.
Oana: So, short sale, they’re much more attractive. So buyers are willing to take the time to participate in a short sale even with the uncertainty of a short sale.
Oana: In the past, buyers didn’t have to do that because they had other options, they had REOs which is pretty much instant gratification. You get your offer accepted, you’re in as quickly as you can get your money to a title. But now with short sales being certainly greater in number out there than REOs. And a lot of times they tend to being good condition because hopefully someone is living in there, someone’s taking good care of the property. Then in those case a short sales makes a lot of sense. It makes a lot of sense for the home owner to do a short sale, and the reason for that is because now they get to have some certainty in their lives. They understand the process, there is a specific time frame that’s going to happen, and you know that when the bank says “Okay, your short sale’s approved and you have to close Escrow by May 25thm,” you know that sometime at the end of May, this whole thing’s gonna b e over. As supposed to waiting there and wondering everyday when you come home form the grocery store and you’re gonna find a notice on your door that says “Get out in 5 days.”
Todd: Right. Okay! You know it’s interesting. I’ve never heard one of our short sale clients say after we closed escrow, that they wish they hadn’t done it. Not one of them ever said “You know I think is should have held out for 4 more months of free rent and try to game the Trustee sale sale date and hope that it didn’t happen and I get to stay here a little more.” They were all grateful that some of them go can out, buy a house right away. Their credit’s much less damaged, they don’t have potential deficiency judgments against them or other things like that.
Todd: What would you say to a person who said “I don’t know if I should do it now or wait like a year.”?
Oana: Well, I would say waiting probably isn’t going to benefit you at this point.
Oana: And the reason for that is, we know what the market looks like right now. We know that there’s a high likelihood of your home selling and of the bank approving your short sale. We know that now. We don’t know what the market will look like a year from now. If we did, you know we have a crystal ball and everybody is rushing to be in our presence.
Todd: That’s right. Okay, good! Well I just wanted to sort of talk to you about that ’cause I think I have the same feeling and opinion that everybody else has that this is really a good time to be a seller. If you’re selling a property that would otherwise be difficult to sell because a lot of houses are selling. I mean, this is April 2012, we’re in the Spring buying season, inventory’s a little bit artificially low, and things are moving quickly including short sales. So that chance of you getting your offer accepted, getting ti submitted, getting it processed, and getting it moving, that big bad day out of your life is sort of appealing right now. It’s easy to do. So anyway, I just wanted to share that with everybody, and that is my update for today and hope to see you on another video. Thanks!