Las Vegas Short Sale Update: Buyers, do your research before making an offer on a short sale.

By: Paul Rowe

Even though we have been in a distressed market for two years now and foreclosures and short sales are commonplace, many Las Vegas real estate agents still are not adequately preparing their clients on how short sales work or the time required for approval. Agents will do themselves, their clients and the sellers a big, fat favor by not making an offer in the first place if they are not prepared to go the distance.

Before all you buyer’s agents out there draw your swords in defense, let me make a few points to save you the trouble.  We (Listing Agents) understand buyers do change their minds, and you have to comply with their wishes. Also understood, is buyers may have a change in their credit profile or job status (very true for Las Vegas!). What is unacceptable is when after 3 weeks, I get a call that the buyer is tired of waiting for an approval…ridiculous. Another beauty is after 6 weeks, the buyer does not like the neighborhood. That is something a buyer can find out in a couple of days.  What these all really add up to, are excuses. In reality, the buyers were never really committed to a short sale in first place. Perhaps, they were just hedging their bets while looking for a foreclosure. This is simply not fair to the sellers. Here is why.

When we receive an offer and forward to a bank to begin the short sale approval process, in most cases we are seeking approval for that particular offer. Unlike banks looking at groups of foreclosure offers being forwarded to them and taking the pick of the litter, short sales are usually worked individually. Now if the buyer bails, the seller in may be forced to put forth another offer (if they have a back up already) and start from square one. The seller may have lost valuable time when they could have left the home on the market for a truly legitimate buyer to come along.

Let’s help all buyers out there to understand what to really expect when considering a short sale.

1. Unless a seller has a pre-approved short sale, in most cases, approval WILL TAKE 2-4 MONTHS, even longer in many cases, such as when your bank statements come stamped with the words Bank of America on them. Remember, you still have to go through the entire escrow period (30-45 days) once short sale approval has been obtained.  By the way, very few short sales currently are “pre-approved”, and even then are often contingent on various factors.
2. Buyers have no control over the approval process. The process is controlled by listing agents or other negotiating entities such as lawyers or agents who have out-sourced the negotiating to third parties. What buyers can do is hire knowledgeable agents who can prequalify the short sale’s potential for a successful close based on their experience.
3. Unless a buyer is really committed and understands the process, don’t make the offer, it is simply a waste of time, one thing the sellers do not have is time. They are in foreclosure!
4. If the buyer is not seeing some type of progress with the short sale after 6-8 weeks, they can then begin to weigh their options. Listing agents, help out your buyers. As information comes to you, pass it on to the buyers so they can understand where the transaction is and that it is moving forward. They will show more commitment if they know as much as you!
5. Short sales offer some of the most attractive deals in Vegas. The homes are in many cases still being cared for properly and not sitting vacant and vulnerable for long periods like the foreclosures. IF you have the patience and want a good deal, check out this option. If you don’t have the time, please…PLEASE don’t tease us with an offer.

Paul Rowe specializes in short sales for Sena and Associates with over 40 current listings.