And why are they taking 20% longer these days?
We all know that short sales are anything but short. But why are they taking longer than ever to close?
Go back a mere year-and-a-half to June 2009. The average short sale was on the market for 6.5 months. That seemed like a lifetime compared to the 3-month average time that a foreclosure was on the market. But it wasn't far off from the 5.3 month average time that a conventional sale was on the market before it sold.
Jump forward to January 2011. Despite the government's efforts to speed up the short sale system; the legions of short-sale processors supposedly hired on by banks to deal with increased short sale demand; the droves of trained short-sale specialists who used to be title agents; and the armies of Realtors who are now competing for short-sale market share, the process takes longer than ever - 8.1 months to be exact.
Conventional sales are doing much better - they're now on the market for an average of 4.9 months. Banks sales are sitting unchanged at 3 months on the market. So why are short sales taking longer to close?
It's not that people are less educated - goodness knows, home owners know more about short sales now than ever. And process problems don't seem to be the issue - after 3 years trying, banks finally have some consistency in their short sale process.
It's not that raw numbers have increased - successful short sales have actually declined by 0.5% from January 2010 to January 2011. And the system isn't bogged down with unsuccessful short sales either - the total number of short sales on the market have declined by the same 0.5% over this time period.
We don't have the answer to the question of why Short Sales are taking 20% longer to complete. We're genuinely interested in your thoughts. If you know a good reason for this increase, why don't you share it with us on our Facebook page. We'd love to know your ideas and your solution on how to speed up short sales. Who knows, your ideas might change the industry!