October 25th, 2011 Categories: Foreclosures
I’ve been waiting on a bank to approve a short sale for months now (one loan, one bank – you would think it would be simple). This made me wonder how many short sales actually close in Montgomery County, and how long do they typically take? And, given the difficulty and frustration involved with a short sale, how many sellers simply give up? I’ll go through my methodology below, but first, here’s the results:
Getting solid, reliable data on short sales may be impossible. To get this summary, I took a look at all closed sales so far in 2011 in our MLS. This data is good, but it’s not perfect. When an agent enters a listing in our MLS, they should note if the listing is a short sale. Many times, they don’t. And, they should accurately indicate a home’s contract and close date. This also doesn’t happen for many listings. Still, this is the best data available and still shows some interesting trends.
How Many Short Sales Close?
A basic review of these home sales was revealing – only around 13% of closed sales were short sales. This number is smaller than I thought it would be. With so many short sales on the market, it seems like more should be closing.
How Long Does it Take?
To find a trend that shows the average time to get a short sale from ‘contract’ to ‘close’, I removed sales with obviously fishy data and those with duplicates, and summarized these sales by the number of months to close. This analysis says that two thirds of all successful short sales takes less than 4 months to close. I’m not so sure that’s right. Based on my experience, I would think that the average time to close would be closer to six months. I would like to see another analysis to sanity check this conclusion.
How Many Sellers Give Up?
Getting this answer was painful. I selected all listings marked as short sales that were withdrawn from the market or expired this year, removed the duplicate listings for the same homes and then checked to see if any relisted (like I said – painful). This left 675 homes. Since 1,035 short sales closed in that same period, this tells us that for every three successful short sales, two sellers can’t get through the process.
I’ll post more metrics on short sales in the next couple of days. If you are interested in finding short sales, see where short sales are located in Montgomery County and the number of short sales under contract. What do you think? Make a comment – I would love to know your thoughts on this.