Short Sale and Bank-Owned Sales Activity
Short Sale and Bank-Owned Property Listings
Percent of unit listings Percentage of unit sales
Kitsap County
2010 10 19
2011 24 31
Jefferson County
2010 6 17
2011 10 27
Not surprisingly, the number of short sale and bank-owned listings and sales has increased significantly in both counties. The percentage of sales is still significantly higher than the percentage of listings, indicating that the lower prices of the short sale and bank-owned properties are attracting buyers away from "conventional sales."
Breaking the data down further another pattern emerges.
Percent of unit listings Percentage of unit sales
Kitsap County
2011 short sales 15 8
2011 bank-owned 8 23
Jefferson County
2010 short sales 4 5
2011 bank-owned 6 22
It is clear from the figures above that bank-owned properties sell at a much higher rate than short sale properties. There are two factors that I believe are causing that pattern. First, short sales can be very time consuming and frustrating. Many buyers avoid them because of that. Or if they do make an offer, buyers often get tired of waiting for the lender to make a decision and cancel their offer. Second, many short sale listings do not sell before the lender forecloses, even if there is a ready and willing buyer. The process of getting a lender to approve a short sale can take months, and it is not uncommon for one department at a lender to be working on a short sale while another department forecloses on the property.
In contrast, buying a bank-owned property is relatively easy. The purchase agreements do tend to favor the lender, giving fewer protections to the buyer than conventional transactions, and lenders are not likely to make repairs that might be needed. But the process moves forward at a fairly predictable pace, and once the bank has accepted an offer, which usually takes only a few days, it is very likely that the lender will go through with the transaction.
If you are considering properties that are short sales and bank-owned, the properties owned by banks are a less stressful alternative. But if the property you want is a short sale, it can work. Just be ready for a bumpy ride.
*A short sale is a sale in which the proceeds of the sale will be less than the amount owed and the lender is being asked to accept that lower amount.
