As a Realtor in Destin, Florida, I deal with short sales and foreclosures/bank owned REO quite a bit. The real estate market along the Emerald Coast from Navarre to Panama City Beach has over 600 short sale properties for sale and over 100 bank owned properties for sale. These figures are calculated from the Emerald Coast MLS, and are counting detached single family homes, attached single family homes, and condominiums. Out of these active listings, 50 short sales have sold through the end of February, and 52 bank owned properties have sold through the end of February 2009. These sales represent 20% of total sales for January and February 2009 in the Emerald Coast of Florida.
I am currently working with a number of buyers and sellers negotiating short sales, which can be a waiting game. To give you an indication of how many other short sale properties are on the real estate market…there are currently 321 short sale properties pending sale; so this means that buyers have put offers in on 321 properties and they are waiting to hear an answer back from the lender as to whether or not the lender will approve the short sale to take a loss on the mortgage. Responses from lenders to a short sale offer can take anywhere from 3 weeks to 8 months (in my personal experience representing bjuyers and sellers). The higher the amount of the deficiency (the loss the lender is taking on the sale), the longer the response from the bank, and if the seller has already been in communication with the bank regarding the short sale the response is usually a shortened time period.
There are currently 73 properties under contract that are bank owned/REO properties. This type of a purchase is a normal purchase time frame…usually when an offer is presented to a bank on a bank owned property we can expect a response in 1-3 business days, and then once approved, can close within normally 30-45 days.
The question then goes to…can a buyer wait to close on a property that is a short sale? If you find the perfect property and you don’t have a deadline as to when you need to move into your new property, then it may be worth it to wait on the response from the bank. But, if you do have a deadline as to when you need to move into your new home then you will be better off to put an offer in on a bank owned property, or even on a property from a regular seller. 80% of the sales the first two months of 2009 have been through regular sellers. Now, some people may argue that you don’t get the best deal from a regular seller, but in this market properties are appraising at the same level. It used to be that appraisers would not use a bank owned property as a true comparable, but now REOs, short sales, and regular sales are all valuing the same. As long as all other things are equal…condition of the property, location, etc…then the appraisals of the properties will be comparable. So, a regular seller must be pretty motivated if they are considering selling their property in this market if they want to compete with rock bottom bank owned prices.
The sales price a bank is willing to accept on a short sale is usually derived from the appraisal that is performed after the offer is presented, and then banks are usually found to accept something within 8-12% of this appraisal value. With an REO, the bank has already performed the appraisal prior to listing the property, so the banks are already well aware of the market, and are usually able to accept a purchase price within 10% of the asking price. I have seen some regular sellers coming down anywhere from 10-20% off the asking price.
As you can see, it is very important to do your homework, and you ask…where can I find all of this information? Well, from your local trusted Realtor on the Emerald Coast. If you are considering a purchase along the beach, then find out what the comparable properties are selling for so you know you are offering the right price. If you would like information on properties, call me at 850.428.0243 or email me at dana@eimersgroup.com. You can also check out my website at danaindestin.com for complete information on short sales, foreclosures, and all properties for sale along the Emerald Coast
