Short Sales Are 34% of Total Sales in Loudoun County

One huge change in the real estate market in Loudoun County has been the proliferation of short sale activity during the first half of this year.  For the month of May 34% of all the listings that have gone under contract were listed as short sales.  This compares to 21% of the listings being marketed as foreclosures/REOs. 

This is a complete shift in the marketplace and represents two things, a willingness of banks to work with homeowners on getting rid of underwater properties and a moratorium on foreclosures that lasted 6 months. 

Less than 6 months ago short sale listings were shunned by a lot of buyers and buyers agents who had become frustrated at the slow responses from the banks.  Many short sale approvals were taking up to 6 months just to get a counter offer.  These frustrated buyers and agents focused on foreclosures as those properties were getting quick responses from the banks. 

A couple of factors have contributed to the shift in sentiment regarding short sales.  The biggest change has been banks assigning more resources to their short sale departments.  This has led to a shortening of the response time to 30-45 days.  Also, there has been an effort by many of the more active agents in Loudoun County to take on the short sales.  The standardization of short sale processing by listing agents has given more confidence in the marketplace that a short sale will be approved by all parties and settle in a timely fashion.

I have personally listed and sold 6 short sales in the past 9 months and have 3 other properties set to close in the next 30 days.  The process has been time consuming in terms of follow up and communication between all parties but the effort has been worth it because the bank avoids a foreclosure, the seller is relieved of a large financial burden and the buyer is getting a very good deal.

Comments

[Radar]

A short sale is better than going to foreclosure, for all parties involved, don't you think?

[Tony Arko]

Absolutely. One thing I didn't mention as a benefit to the seller is the ability to repair credit much faster with a short sale versus a foreclosure. Some "credit experts" suggest you can buy another home in two years, but I had one client get a mortgage 12 months after a short sale with Suntrust.