08.02.08 The Shifting Sands of Short Sales
It has finally happened. The Short Sale shift has arrived and I have seen it.
Working with Short Sale clients I have always been on the receiving end of phone calls from real estate investors. Mostly ones who were flippers, looking to buy a property, throw a minimal amount of (mostly cosmetic) improvements into it, and sell it quickly at a profit.
As the market slowed locally, quick flips became more difficult as inventories and the average Days-On-Market increased to where the economics of the quick flip evaporated faster than $2.00/gallon gasoline. My Short Sale listing inventory increased and they continued to sell, but a bit more slowly and more typically to people who wanted to live in the homes they purchased.
Frankly, this works out better. Short Sales were never well priced by flipper standards and the offers from buyers who were looking to flip the homes reflected that. Most flippers were looking to buy at a price versus market value ratio that was usually lower than the lienholders would accept and negotiating a Short Sale with the lienholder is a lot of work to engage in when you know in your heart that a lender will never accept the deal. But I worked up each offer packet and tried to sell it to the lienholder, more often than not with the only result being a lienholder who felt their time was wasted with a ridiculously low offer and a buyer who was annoyed they waited so long for a response from the lienholder only to have their offer rejected!
But like I wrote, that's all changed and for the better. Based on my recent experience in the Short Sale world, the flipper has been replaced by the "holder". In the past couple of months I have been receiving calls and offers from investors wishing to purchase well priced short sales, but not to flip them... rather, they want to rent them, hold them and make their profit money when the market rebounds. They are not looking for the quick flip, so immediate resalability is not an issue and buying below market is their desire, but they do not need to be as low, because they plan to do any renovation work when the market rebounds and the upside of their purchase/sale ratio is significantly higher because the house is worth more. And what makes it better is that these offers actually get accepted by lienholders because they are realistic.
- Steve Shatsky
It has finally happened. The Short Sale shift has arrived and I have seen it.
Working with Short Sale clients I have always been on the receiving end of phone calls from real estate investors. Mostly ones who were flippers, looking to buy a property, throw a minimal amount of (mostly cosmetic) improvements into it, and sell it quickly at a profit.
As the market slowed locally, quick flips became more difficult as inventories and the average Days-On-Market increased to where the economics of the quick flip evaporated faster than $2.00/gallon gasoline. My Short Sale listing inventory increased and they continued to sell, but a bit more slowly and more typically to people who wanted to live in the homes they purchased.
Frankly, this works out better. Short Sales were never well priced by flipper standards and the offers from buyers who were looking to flip the homes reflected that. Most flippers were looking to buy at a price versus market value ratio that was usually lower than the lienholders would accept and negotiating a Short Sale with the lienholder is a lot of work to engage in when you know in your heart that a lender will never accept the deal. But I worked up each offer packet and tried to sell it to the lienholder, more often than not with the only result being a lienholder who felt their time was wasted with a ridiculously low offer and a buyer who was annoyed they waited so long for a response from the lienholder only to have their offer rejected!
But like I wrote, that's all changed and for the better. Based on my recent experience in the Short Sale world, the flipper has been replaced by the "holder". In the past couple of months I have been receiving calls and offers from investors wishing to purchase well priced short sales, but not to flip them... rather, they want to rent them, hold them and make their profit money when the market rebounds. They are not looking for the quick flip, so immediate resalability is not an issue and buying below market is their desire, but they do not need to be as low, because they plan to do any renovation work when the market rebounds and the upside of their purchase/sale ratio is significantly higher because the house is worth more. And what makes it better is that these offers actually get accepted by lienholders because they are realistic.
Do you qualify for a Short Sale in the Dallas / Fort Worth area? Need to speak with a Short Sale Specialist? Please email or call me today for more information. Just click on the "Contact" tab at the top of this page. I will be happy to schedule a consultation so that we can get started on helping you move forward!
- Steve Shatsky
08.01.08 Why I am a Short Sale Specialist
I was recently asked by a prospective home seller why I chose to become a Dallas area Short Sale Specialist. There are frustrations with Short Sales that do not exist in more traditional real estate transactions, and those other transactions are frequently more financially lucrative.It was an easy question… for me, it’s all about the people I get to know and how I get to make a difference in their lives.
My Short Sale seller clients are some of the nicest, bravest, most remarkable people. Some have been cancer survivors with enormous medical bills still left to pay, others have suffered due to economic circumstances beyond their control and others have been the victims of fraud. Their lives have been affected negatively by their circumstances and in some cases their children's lives have been similarly impacted by the ripple effects. Through my Short Sale specialization in the Dallas area, I get to help these people. And it's a privilege.
My Short Sales may not be the most expensive homes I have sold, but no seller getting a check for hundreds of thousands of dollars has ever cried the way my FHA short sale clients have when they received their $1000 seller participation incentive. I explain to my colleagues who do not do Short Sales that it's like handing a seller one of those giant Mega Millions lottery checks.
And no client has ever called me 6 months after their traditional sale to just let me know how they were doing (health and life-wise) and continue on to spend 15 minutes telling me how my assistance and compassion during a time in their life when finding someone to listen and help seemed impossible to them had made a their life when it was most needed. The amazing thing is that these examples are the norm... not the exception! Their stories make me grateful that I could help them in such a personal way and hearing how I helped them to turn things around nourishes my soul and gives me the perseverance to sit on hold listening to recoded elevator music for 40 minutes for the next client whose bank I need to contact.
Through their words and their expressions of appreciation my Short Sale clients give back to me as much as I give to them, making a difference in my life too!
- Steve Shatsky
I was recently asked by a prospective home seller why I chose to become a Dallas area Short Sale Specialist. There are frustrations with Short Sales that do not exist in more traditional real estate transactions, and those other transactions are frequently more financially lucrative.It was an easy question… for me, it’s all about the people I get to know and how I get to make a difference in their lives.
My Short Sale seller clients are some of the nicest, bravest, most remarkable people. Some have been cancer survivors with enormous medical bills still left to pay, others have suffered due to economic circumstances beyond their control and others have been the victims of fraud. Their lives have been affected negatively by their circumstances and in some cases their children's lives have been similarly impacted by the ripple effects. Through my Short Sale specialization in the Dallas area, I get to help these people. And it's a privilege.
My Short Sales may not be the most expensive homes I have sold, but no seller getting a check for hundreds of thousands of dollars has ever cried the way my FHA short sale clients have when they received their $1000 seller participation incentive. I explain to my colleagues who do not do Short Sales that it's like handing a seller one of those giant Mega Millions lottery checks.
And no client has ever called me 6 months after their traditional sale to just let me know how they were doing (health and life-wise) and continue on to spend 15 minutes telling me how my assistance and compassion during a time in their life when finding someone to listen and help seemed impossible to them had made a their life when it was most needed. The amazing thing is that these examples are the norm... not the exception! Their stories make me grateful that I could help them in such a personal way and hearing how I helped them to turn things around nourishes my soul and gives me the perseverance to sit on hold listening to recoded elevator music for 40 minutes for the next client whose bank I need to contact.
Through their words and their expressions of appreciation my Short Sale clients give back to me as much as I give to them, making a difference in my life too!
- Steve Shatsky