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Last week I attended an invitation only audio conference that included panelists from Bank of America, Wells Fargo Bank and Freddie Mac.  Based on my experience with representing clients in short sales last year, the idea 2010 will be “the year of the short sale” did not sound like the “good news”. 

I’m sure that most buyers, sellers, escrow officers and agents involved in short sales transactions last year would concur…the track record is dismal, with an unofficial fall out rate at 80 to 90 percent of short sales transactions. 

Short sale properties are most often purchased by first-time homebuyers. Currently, mortgage servicer approval on offers for short sale properties can take several months, making these transactions difficult for current homeowners who often need to conduct not one, but two, transactions in quick succession. In contrast, first-time homebuyers more often have flexibility around the timing of short sale closings.  According to the panelists, effective April 5, 2010, the new Treasury Department guidelines contained in the Home Affordable Foreclosure Alternatives Program (HAFA) will go a long way to alleviate the challenges that have made short sales difficult and frustrating.

 As can be seen here, short sales have become the largest category of distressed property transactions, accounting for well over a third of these transactions, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.

Short sales have become a preferred means of resolving mortgages in default, both for large lenders and for the government agencies supporting lenders’ efforts. Short sales typically result in lower lender losses and houses left in more saleable condition. Moreover, sellers that agree to a short sale can often buy another house with mortgage financing after only two years. For borrowers going though the foreclosure process, mortgage financing can be unavailable for a period of five to seven years. 

While this varies somewhat county by county, my experience is that short sales or bank owned homes represent a high percentage of homes for sale in the $500,000 price range and below. 

Bank owned and short sales require a high level of expertise. I am always available to answer your questions or discuss your concerns. Simply text, call (650 325 7877) or email me (russ@brokerruss.com)  for a prompt response.

Now, more than ever buyers and sellers will benefit from the advice and guidance that an experienced REALTOR® can provide. If you are in the San Francisco Bay Area, I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loan information,  market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The Insiders Guide to Buying and Selling Real Estate” and more. Of course I am always available to discuss your real estate or mortgage related questions or concerns, just call, text or email me for a prompt response.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240.