Short Sales and Foreclosures in Today's Market

There is a lot of news about distressed properties in today's real estate market. Though short sales and foreclosures are both considered "distressed sales," the processes and your success in buying one are very different from each other.

While buying a foreclosure generally only requires that you get the lender/seller/owner (typically a bank) to agree to your offer price and terms, a short sale requires not only the seller/borrower's approval but the seller's lender (or in many cases, lenders) must also accept the price and terms of the contract. This is a HUGE difference.

The following recap of May sales sheds some light on just how divergent these two types of transactions can be.

Of the 119 total closed sales in May for stick built houses on less than an acre in Bend, 13 were short sales (10.9%) and 54 were foreclosures (45.4%). Contrast those percentages to the proportion of houses currently listed for sale that are short sales and foreclosures; 32.9% and 5%, respectively.

So while short sales account for nearly 1 in 3 houses listed for sale, they make up just over 1 in 10 closed sales. On the other hand, only 1 in 20 houses for sale is a foreclosure but nearly half of closed sales last month were bank owned!

In addition, the time it took to close the 13 successful short sales last month was a median of 131 days. On the contrary, the median number of days it took for a foreclosure sale to close was 75, nearly 2 months shorter! (The median time on the market for all sales last month was 107 days).

If you or someone you know would like to learn more about the differences between traditional transactions, short sales and foreclosures, please give me a call. I'd be happy to talk with you about the many important differences you need to know about, whether buying or selling.

May Home Sales Continue Upswing

Sales of stick built homes on less than one acre in the Bend area increased 14% in May from a year earlier. 122 sales were reported to the MLS of Central Oregon last month, compared to 107 in May of 2008.

The time it took to sell a house also improved, with the median time on the market for sales closed in May totaling 106 days, versus 164 days a year earlier.

The median sale price for homes sold in May was $217,450, down 28.7% from May 2008. The median price increased from April's $195,000 and from $215,000 for houses sold through the first 4 months of the year however.