Sequim Short Sales, Sequim Short Sale Homes For Sale
Buyers are looking for the best value right now in a nice home in Sequim and Port Angeles. As part of that process, many buyers are considering either a foreclosure or buying a home that is a Sequim short sale. I write elsewhere about Sequim foreclosures, so here let's consider short sales. Is a short sale a good option, and can you get a great bargain?
A short sale occurs when a home's fair market value is less than the total balance owed on the mortgage. Why would a bank consider a short sale when they would have to accept less than what is owed to them? Because property values have dropped, and the value of this particular home is less than its value, and if they do not agree to sell it for a loss, they will have to foreclose on the home (assuming the owner has either stopped making payments are will). For a big bank a foreclosure can take 10 months to a year from the time the light bulb goes on and they realize they have a loan that is in default, to the time it has been foreclosed and back on the market for sale with an REO. An REO is a third party entity that contracts with the bank to manage the property, get it listed with a Realtor, and handles the negotiations and gets it sold.
The problem that buyers are experiencing is that after they negotiate with a seller and sign a Purchase and Sale Agreement, and then send that in to the bank short sale department for approval, . . . they never get a response. Days and weeks and months go by and . . . nothing. The agreements die a natural death and everyone walks away frustrated at the banks for not doing what was logical and certainly what would have made sense even for them.
This really has become a nightmare scenario for many buyers and sellers, and the bureaucratic black holes consisting of the loan servicing companies, the banks, their legal departments, and all the other people involved between the west coast and the east coast (and there are many), has made trying to buy a home as a short sale one of the most ridiculous bureaucratic labyrinthian entanglements I've seen in 30 years in the real estate business. I've personally had three transactions all die as short sales because the banks would not respond and weeks and months passed, and finally the buyers moved on with their lives. I would find this hard to believe if I hadn't experience this so many times right here in Sequim.
To understand more about this log jam and the details of what happens in a Sequim short sale, read more of my articles on Sequim short sales.