Boise Short Sale Inventory Breakdown

Two or three years ago, nearly two-thirds of our sales were short sale transactions.

With our improving Boise real estate market, things have changed.

Here’s a breakdown of our current short sale listing inventory.

  • Total Available Listings: 2,013
  • Total Short Sale Listings: 227
  • Short Sale Listings With Accepted Offers: 179
  • Unsold Short Sale Listings: 48 (only 2.4% of all available listings)

Some lenders have improved their short sale processing, but short sales remain difficult and often (usually?) take many months to close.

Short sale listings often attract multiple offers that drive the sales price up.

Ultimately, only one buyer gets the property and it’s usually the first buyer with an accepted offer.

Despite the perception that all short sales are good deals, many short sale properties are in poor condition and lenders require an appraisal (sometimes several) to ensure that the property sells for fair market value.

In general, the best buyer for a short sale listing is a buyer who doesn’t care if they get the property.

Data pertains to Ada County single-family homes on lot or acreage.  Data does not include condo or townhome properties.

 

Are We Done With Short Sales Yet?

Back in 2009-2011, more than 60% of our listings/sales were short sales.

It’s interesting to see how things have changed.

Here’s a breakdown of current short sale activity.

  • Total Available Listings: 1,857
  • Short Sale Listings: 257 (13.8% of all available listings)
  • Short Sale Listings With Offers: 200 (77.8% of all short sale listings)

Takeaways

  • We are seeing very few new short sale listings.
  • Most (nearly 80%) of existing short sale listings have accepted offers awaiting lender approval.
  • Despite some improvements in lenders’ short sale processing, short sales remain difficult, frustrating, and can take months or more to close.

I have often said that the only person who should buy a short sale is someone who doesn’t care if they get the property.

Data pertains to Ada County single-family homes on lot or acreage.  Data does not include condo or townhome properties.

 

Why Boise Short Sale Listings Are Misleading

I get a lot of inquiries from buyers who think they want to buy a short sale listing.

Most of those inquiries occur when a buyer sees short sale listings on various real estate websites that are displayed as “active” listings.

Due to the way our MLS reports short sales, many short sale listings appear as “active” when they actually have an accepted offer that’s awaiting lender approval.

Most of the time, the buyer with the first accepted offer is the buyer who will get the property.

(yes, there are exceptions, but they’re too complex to explain in this brief post).

Here’s a breakdown of current Ada County short sale listings:

  • Total Short Sale Listings: 334
  • Short Sale Listings With Accepted Offers: 271
  • Short Sale Listings Without Accepted Offers: 63

The 63 short sale listings without offers are the only short listings that are truly available.

When you spread those listings across the 17 MLS areas in Ada County and match them to a buyer’s criteria (price, location, square feet, bedrooms/baths, schools, commute time, etc.), you have the ultimate definition of slim pickings!

And, if you DO find a short sale listing that matches your criteria, be prepared for a long, frustrating escrow while you deal with a lender (or multiple lenders) who will often take months, or even a year or more, to process your short sale.

My last short sale required selling the property three times and took a year and a half to close.

Which is why I don’t do short sales anymore.

Data pertains to Ada County single-family homes on lot or acreage.  Data does not include condo or townhome properties.

 

Loan Servicers Implement New Standards

Last April’s mortgage servicing settlement with the U.S. Department of Justice and 49 state attorneys general required five major mortgage lenders to implement 320 new mortgage servicing standards by October 2, 2012.

The lenders were Ally, B of A, CitiBank, JPMorgan Chase, and Wells Fargo.

The new standards include single point of contact, loss mitigation, customer service, and other servicing practices.

A designated  “settlement monitor” is responsible for ensuring that the lenders adhere to the new standards and will be assessing the lenders servicing performance with 29 criteria, including offenses such as erroneous foreclosure sales, wrongful denial of loan modifications, and other metrics.

This is a step in the right direction, but much more will be required to overcome ongoing foreclosure and short sale servicing deficiencies.

 

 

New Guidelines To Ease Short Sale Headaches

Fannie Mae and Freddie Mac will implement new short sale guidelines effective November 1st in an attempt to make short sales easier for qualified borrowers.

Changes in the new guidelines include standardization of processing and relief for borrowers who experience relocating more than 50 miles for a job, death of a borrower or co-borrower, divorce or legal separation, illness or disability, and other circumstances.

Loan servicers will also have the authority to approve short sales meeting guideline requirements without obtaining prior approval from Fannie or Freddie.

This is a HUGE step in the right direction that should help many borrowers navigate the short sale process!