Naples Florida Short Sale Properties
See Also: Naples Florida Foreclosures
Short Sales
A short sale is when the home's value is less than the mortgage amount due a lender and the lender is opened to the idea of accepting the property's current value for payment. Such as a home that has a $500,000 mortgage, that is now currently worth $300,000.
Between short sales and foreclosures listed for sale in the Naples area, there is a much higher concentration of short sales available. But between short sales and foreclosures that actually sell, there is a much higher concentration of bank owned properties.
Foreclosures vs. Short Sales
Percent of Listed vs. Percent that Get Sold
The source of the information in the chart above is from the proprietary database compilation of SunshineMLS, LLC - Naples' Multiple Listing Service. The accuracy of this information on Naples Florida Real Estate is not warranted or guaranteed.
Short
sales resemble a shell game, and often should be considered a waste of time for
serious buyers, unless the buyer is ultimately wi
lling to purchase
the short sale property near its true value.
Why are short sales a waste of time, for the uninformed buyer? The list price is M-E-A-N-I-N-G-L-E-S-S. THE BANK DID NOT SET THAT LIST PRICE, THE SELLER DID. The seller does not care what price it sells for, and does not know what price the bank will accept for an offer, until an offer gets to the bank. As such, short sales are usually listed at prices far below their true value, in order to lure a uninformed buyer into submitting an offer.
With a lowball offer in hand, the seller now has something for the bank to begin its process. This approval process will normally take 2 to 4 months or more to get an answer back from the bank. The bank then rejects the lowball offer, and then provides the seller with a "Bank Approved" price. The uninformed buyer, who thought they were going to get the deal of the lifetime, then goes away, frustrated over the time they wasted. But the seller can now relist the property at a Bank Approved Price. So the sellers got what they needed.
The list price of a short sale is MEANINGLESS. It does not make any difference if a $300k property is listed at $300k, $200k or for $1 dollar. The seller will accept any offer, as no matter what it sells for, they are not getting anything at closing, the bank is getting it all. Unlike most sellers in the Naples area, who want more for their property than what it is worth. The bank of a short sale, just wants what what it is currently worth. Which will be a good value in this current market for any buyer.
Why is the bank approval process so time consuming? The offer is submitted along with 50 pages of financial information from the seller. The offer sits around for a couple of week or so along with the thousand others at the bank waiting to get processed. When the bank gets to the file, they review the info, and order two appraisals. The appraisals come back a week or so later, and are at the bottom of the pile, until they get reviewed. If everything looks good, then the bank will respond with the Bank Approved price. This is a couple of months. If the person gets fired, or leaves, or gets promoted or get sick, then the file sits around for a couple more weeks until it gets assigned to someone new. So now you are looking at 4 months.
If the short sale listing states that it is a Bank Approved Priced, then the process described above has already taken place, and the deal can get done at that price. If a buyer offer less than the approved price, then the process starts over, and is generally another waste of time.
Take the following real-life example of a short sale transaction
- A. Short Sale property is listed for $275k. Super Deal.
- B. Goes under contract in just 5 days.
- C. Three months later they hear back from the lender that they will accept $310k, not $275k. A Great Deal! But adios to the original buyer, because they where expecting to buy at $275k. The property is relisted at the $310k price.
- D. One month later, it goes under contract by a new buyer.
- E. Closes after that for the bank approved price. A great deal.
Foreclosed Properties vs. Short Sales
Foreclosure vs. Short Sale
| Foreclosure | Short Sale | |
| Who Owns the Property | Bank | Seller |
| Who Selects the Agent | Bank | Seller |
| Who Selects the List Price | Bank | Agent/Seller |
| Who maintains the property | Bank | Seller or Nobody |
| Who is paying utilities | Bank | Seller or Nobody |
| Who Pays Back Fees and Taxes | Bank | Negotiated |
| Response Time | Quick | Delayed or Never |
| Likelihood of Selling | High | Low |