Having just experienced yet another “pending” short sale fall out of escrow, I am wondering if these “transactions in limbo” can really be considered as Pending. With no meaningful time lines given by the lenders who are supposed either approve or not approve a pending offer on a "short sale"; days, weeks and even months pass before the prospective buyers finally give up out of frustration and move on to another property.
Almost every agent (and their clients) who has dealt with a short sale transaction has experienced the same frustrations. Even the approval time frames set by the lenders themselves become a moving target. With extension after extension after extension demanded by the banks during the course of the "approval" process, it is no wonder Buyers lose patience and look elsewhere for a property.
In an attempt to determine just how bad this faux Pending status is I’m going to track all the current Pendings (as of today) and see where they are 30 days from now. [There used to be a time, not too long ago, when a 30-day close was the norm. Not so, today.]
As of this afternoon our MLS shows 787 properties [residential properties in Reno Sparks] in various states of “Pending” status. These breakdown as follows:
| "Pending" Status | # | % |
| Active/Pending-Call | 97 | 12.5 |
| Active/Pending-Loan | 307 | 39.5 |
| Active/Pending-House | 17 | 2.2 |
| Active/Pending-Short Sale | 199 | 25.6 |
| Pending – No Show | 158 | 20.0 |
| total | 787 | 99.8 |
I have recorded the MLS numbers for all 787 properties. I will revisit these properties in 30, 60 and 90 days to see what is outcome. Would anyone care to predict how many actually close? Hint: It’s to the point now that when a property that one of my clients had their eye on goes pending, I tell them not to worry because odds are it’ll be back on the market in a few weeks.
Guy Johnson
Btw, the “short sales” to which I am referring above are not the same as the REOs (bank owned properties). As Diane pointed out in the previous post, REOs are moving. See “But the big shift I’m seeing now is that banks are getting serious. Once they take back the keys, they list them low, respond quickly, take the best offer and open escrow. No more hemming and hawing…they seem to finally be getting down to business, and this will be the year that they blow them out the door.”
Perhaps I should do a post tracking Short Sales vs. REOs.
smarten
Good observation Guy.
Of the 199 of active-pending short sales, I predict 6 will close within the next 30 days.
I predict 10 will close within the next 60 days. And I predict 11 will close within the next 90 days.
You didn’t ask how many would go into foreclosure [assuming they’re not already in it]. I predict 88.
Okay, now keep score Guy.
NAS
Guy,
Sorry to hear.
Short sales remind me of a progressive food chain with too many of the lender’s “butt boys” running numbers for THEIR best outcome. Unfortunately, while they fool around trying to find boxes to check off, interested parties get frustrated and move on. There’s got to be a better way to get through all of this.
I think Smarten’s predictions are generous.
Kimo
Guy,
Not being a real estate agent, I’m not familiar with the definitions of the various “pendings.” Can you give me an idea of what’s going on in each case? Thanks for posting this info.
Dave
This will be an interesting thread. Especially if we hear from people who have actually gone through the REO bank-as-seller process. It seems a bit odd to me that a buyer will pay hundreds of thousands of dollars for as-is property with no recourse, no disclosures, and buyer taking all the risk.
Apparently people do agree to the bank’s conditions. A good inspection will likley uncover most apparent issues but certainly banks are putting themselves in a superior position and people must go along with it or their offers are not even considered.
There are penalties for delays only for the buyer and little room for negotiations, at least, that’s what they’d have you believe. I think a buyer would just have to be particularly careful and dispassionate but the deck seems stacked.
I saw one waiver required as a condition to submitting an offer also held the listing realtor, not just the bank, harmless from any and all claims (this is the listing that included all appliances, but in fact, they were gone, including the exhaust fan over the stove).
These ads pushing foreclosure sales and REO’s make them sound like bargains…who knows?
MikeZ
Almost every agent (and their clients) who has dealt with a short sale transaction has experienced the same frustrations.
It’s not just here, Guy. Two long-time friends of mine are agents in New England and they have the same complaints.
The banks drag their feet. They change the rules, they change their minds. Good faith” means nothing.
This is exactly why more and more “owners” are throwing their hands up in frustration and just walking away.
Jingle mail,
jingle mail,
jingle all the way
Guy Johnson
Kimo,
Thanks for your question. I’ll give you the definitions as I understand them. [Note: If any other agents would like to chime in with better definitions, feel free.]
Each of the five statuses indicates that the property is under contract and escrow has been opened. However, the first four “Active/Pending” statuses indicate that the property can also continue to be shown (i.e. possibly for a back-up offer). Only the “Pending – No Show” status does not permit further showings by agents.
Active/Pending-Call: call the listing agent for additional information.
Active/Pending-Loan: the contract is pending loan approval.
Active/Pending-House: the contract is contingent upon the sale of the Buyers’ house.
Active/Pending-Short Sale: the contract is dependent upon third-party (bank) approval.
Pending – No Show: the contract is solid and simply waiting for the close of escrow.
Usually listing agents will change the status of a listing to one of the “Active/Pending…” statuses, and then change the status to “Pending- No Show” after all contingencies have been lifted.
Hope this helps.
Reno Realty Blog: Reno Real Estate, Market & Trends, Nevada » Pendings Schmendings - 30 Days Later
[…] Pendings Schmendings – 30 Days Later by Guy Johnson Thirty days have passed since I took a snapshot of the pendings. The one-month-later status of those pendings is shown below. It […]
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