Sacramento Real Estate Views

Is It Available or Not!?

The Term “Active Short Sale Cont.”

There is some confusion in the market today with a relatively new term that relates to the market status of a home called “active short sale cont.”

Short sales are new for our market.  They have only been around in abundance for the last year and a half in this cycle and most buyers, first timers especially, aren’t familiar with the term.  It appears that the home is available because the word “active” is there but this is misleading.

In the process of a short sale, the seller/borrower must produce financial documents showing that there is a legitimate need to sell for less that what is owed on the home.  The lender doesn’t want to take a loss and won’t approve the short sale without good reason to do so.

Currently, this process takes forever due to the volume of short sales happening nationwide. Our economy and value losses in our region have taken their toll and some can no longer afford to stay in their homes.

Waiting On Lender Approval

After the seller/borrower of the home to be sold short has gathered together all of the financial information they need to submit to the lender, the listing agent packages those documents along with the listing agreement and the highest and best offer and sends it to the lender for their approval.

This is when the property goes into the status “active short sale cont.”.

Listing agents tend to submit only one offer to the lender so that the financial package is streamlined and efficient in the hope of getting a speedy approval.

This rarely happens as the volume of files the lender is  receiving requesting a short sale is just more than their loss mitigation departments can handle.

And More Waiting

After the package is submitted, the waiting game begins…and goes on and on and on.

While the short sales process has gotten quicker, in the Rocklin and Roseville real estate markets, the average days on the market for a short sale is 169 days. This is the average amount of time it takes for a short sale to go into “pending” status.

Then add 30 to 45 days in escrow and the average time for a home to be sold short in Rocklin and Roseville since August 1st of 2009 is roughly 209 days!

Sweet!

The days on market time stops when a home goes pending sale.

“Pending” status in a short sale is when the package has been approved by the lender and the offer has been accepted…if the buyer is still around to close!

Often, the original buyer disappears long before the short sale approval ever happens and then the seller/borrower starts over with a new buyer.  The process just takes too long.

With the new buyer, time frames are shortened as the short sale has already been approved and it’s then a matter of submitting a new offer and getting lender approval.

“Buyer disappeared, need offers!” is a common comment in the confidential agent remarks in the MLS.

All in all, and I’ve said this before far too many times, there is nothing short about a short sale.  If you’re in a hurry trying to take advantage of the first time home buyer tax credit..you won’t have enough time to get it closed before the expiration date.

Have questions?  Please feel free to call or email.

Thanks for visiting!

Related posts:

1. The Foreclosure Crisis Is Ending
2. Rocklin Short Sale Statistics
3. Have You Received a Notice of Default?

Tags: short sales sacramento rocklin roseville

This entry was posted on Sunday, January 31st, 2010 at 7:19 am and is filed under First Time Home Buyer Info, Your Questions Answered!. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Ryan Lundquist said at February 12th, 2010 at 9:44 am

   I appreciate the thoughts on “Active Short Sale Cont”. From your experience, do agents still accept offers during this time period?

   I like how Bay Area MLS uses “Contingent” instead of “Active Short Sale Cont.” I believe that is the case anyway.

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