As a Buyers’ Agent, I write more Sales Contracts than the average Realtor.  That’s because I don’t write any Listing Contracts and 99% of all real estate brokers do, I spend 100% of my time working with buyers.  A few years ago when we were at the height of the Sellers market I was writing an average of 2.5 Sales Contracts for every Buyer. Most homes had multiple offers and sold for more than the asking price, so many contracts written were rejected and then we would start the process again. This situation is stressful for my Buyers and no fun for me either. When that era came to an end and real estate returned to normal, Buyers could actually “sleep on it” before making a life altering decision.  My Buyers and I could expect that a written Sales Contract would be negotiated to a successful close in most every case.

Then along came short sales.  In my 18 years of selling real estate in Portland, I had never written a Short Sale Contract until 2009.  I would gladly go back to dealing with multiple offers over short sales. With multiple offers we were dealing directly with the Sellers and we received an answer back within 24 hours, sometimes less.  The pain was sharp but it was fast, and if you lost that one you went looking for the next one. Today with short sales, the process involves the bank(s) holding  the mortgage(s) that are for more than the selling price. In most cases we are dealing with Banks who often don’t know what they are doing, and take weeks even months to respond. Sometimes they don’t respond at all.  There is no end to the process , it just keeps going and going…..

Here are three stories from my recent adventures in Portland Short Sales, each for a different Buyer. The first house we wrote the offer on had an already accepted offer but the Buyer ran into financing difficulties and it sale failed.  Our offer was accepted in writing within 48 hours by Citi Bank, who had both the first and second mortgage.  A new world record for a bank.   Life was good as we moved through inspection and financing and were ready to close with an appointment set with the escrow company to sign in two days. The escrow officer called Citi Bank to confirm the wire transfer instructions and was told that the second mortgage had been sold three days earlier.  They were very sorry but could no longer convey clear title so the deal was off. Remember, we had written approval from them, yet there was nothing we could do and they were no help. Due to the heroic efforts of the John L Scott listing agent, a deal was agreed to with the new mortgage holder and the house closed two weeks late.  The lesson learned here is that in a short sale in today’s market anything can happen and the banks have no real obligation to do what they say they will do

My second client made an offer on a condo that has both a first and a second with different banks.  According to the listing agent the bank is hard at work and we should hear something soon.  That was three months ago and we are still waiting.  Any bets on this one ending positive?

My third client made an offer on a new construction house that had three other offers.  Since my Buyers were very strong and willing to pay more than the asking price we went ahead and submitted an offer.  Two days later the listing agent informs me that the home is scheduled for foreclosure in 10 days.  Since the second mortgage bank was unwilling to work out a deal, we decided that a foreclosure would be a good thing.  You see in a foreclosure, the second mortgage gets wiped out which would leave the first mortgage bank free to accept one of the four offers already written on the property.   Or so logic would have it.  Apparently the asset manager that handles short sales doesn’t handle REO’s (real estate owned) and therefore has no choice but to move the file on to the REO department.  Of course he has no idea who that is or where they might be located, so his advise was to wait until the property was listed again in say three to nine months, since that is how long the bank was taking to get clear title and re-list the property as a bank owned property for sale.  Another one bites the dust! We continue to look for another property but this one still haunts my Buyers because it was the one they really wanted. My Buyers and I have decided to avoid the stress and only look at houses that are truly bank owned or Seller owned.

This property did come back on the market just three weeks later as a foreclosure an my buyers made the same offer as before and it was accepted.  In a weird way this did work out for everyone.

Webster defines available as: obtainable or accessible and ready for use or service.  When you get right down to it, short sales really aren’t available for sale or are they?