Last week, in Alum Rock area (area 5), a short sale listing became available on the market 50% below the market value. Soon after it’s listed, phone calls, door knocked, prospected buyers and agents swarmed to the property. The seller couldn’t but shut the door and rejected everyone. The listing agent could bearly handled the non-stop phone call inqueries, finally made an agreement with the seller to have a limited viewing in Open House format for all inquiring buyers and agents – in a midweek, for a window of only 2 hours.
Subsequently, In the recorded information line, the listing agent set up the instructions for offers, deadline and critical steps to follow in order to submit an offer. Two days later, 108 offers were received, out of those 108 submitted, some lucky ones got returned calls from listing agent to join a 2nd round of bidding instructions.
The procedure is not uncommon, the uncommon thing is at this point, the listing agent only wanted bidders to sumit IN A PIECE OF PAPER: contact info and bidding price. No paper work had even begun, no one signed any paper yet.
To make a long story short, eventually this got settled. Listing agent’s tactics made the transaction move forward. Hardwork had just begun, in the next few months, uncertainties still lie along the negotiation road, and will the winning bid finally be the new owner of the property? No one knows when and no one can answer.
We have to give the seller and the agent’s determination to solve problem and keep work moving forward some credits. As I had wrote earlier in “Short Sale II”, a phenomenon appeared in the beginning of the year that a number of short sale owners were not co-operating are increasing, which made the showing and selling very difficult and impossible. Thus, the listings sit on the market for indefinite time. The more short sale inventories showed in the market, the more they will affected market price severely.
On the other hand, after receving offers, the process of short sale have just started. Most agents have no good comments in today’s short sale process, the average time to close a short sale transaction is 6 months – if you are lucky. Although CAR has newly implemented the Short Sale addendum in a clause demanding lenders must respond to buyer to have a binding contract in 45 days. It’s too early to say how this will help with the flow of process and the entire real estate market. But in the previous years, 98% of short sale buyers walked away after winning the bid, beacuse the “long and winding road” in the process is just too uncertain and beyond reasonable.
By the way, of course, the winning bid of this Alum Rock listing had passed over the fair market value. Hopefully, it’s a good sign of the Valley buying season.