With so many short sale listings on the MLS in the Twin Cities right now, there are a lot of buyers that are “locked up” in offers on these properties for weeks… and months… with the high probability that they will ultimately not be able to purchase the house at the price they offered. See my previous article for more background on my short sale experiences.
Since many times the eventual response from the bank is a no or “you need to bring your offer up x%” or the buyer gets outbid by a later offer, these properties could be tying up significant numbers of buyers who would otherwise be purchasing (and closing!) on another property. This weekend I was told there were 4 offers on a short sale I was showing to my buyer. That means 4 houses with ready, willing and able sellers (“traditional sellers”) are stuck waiting for the bank to reject 3 or all 4 offers sometime in the next 30 – 75 days before they’ll get their chance at those buyers.