The dominance of short sales in Vancouver is becoming overwhelming. In conversations I have had with Robin Conrad ,our local VA realtor in Vancouver, he says that more than 60-70% of all transactions are short sales, which means that many buyers are waiting anywhere from 3 to 6 months to get bank clearance for their transaction to go through. A lot of people in Vancouver ask why it takes so long for a bank to decide if they can accept the offered price. The only information we have been able to find on why it takes so long for banks to consider offers is that they don’t want to take the loss on the house to show on their books that as a company, the bank is taking tremendous losses. Most larger banks want to cycle losses in slowly, so their books don’t show overwhelming losses per quarter. If they trickle the short sales into their equation, it shows mediocre losses per quarter, rather than one huge flood of losses. This is why the short sale process takes so long. The reality of short sales is that less than 10% of them ever actually close, meaning that you as the consumer can’t or won’t wait six months, and typically walk away from the transaction, or the bank holds out and waits for someone to come along and give a higher offer than what you are willing to pay for the house. A lot of times if there is a second lienholder involved in the transaction, one bank will agree to sign off on it, and the second will verbally sign off on it, but it gets to the closing table and the bank changes their mind and wants more money. The buyer in that predicament has to either come up with more funds to close on it, or walk away from the deal. This happens an overwhelming number of times. It is always crucial to ask your agent if there are two banks involved that have to sign off, and never under any circumstances, ever accept a verbal agreement from a second bank. Make sure you always get their acceptance in writing. Numerous times when we have had the verbal acceptance, we get to closing, especially in Vancouver, and the bank comes back and says they want $5,000 or $10,000 more to accept this, and the first always says no, and an entire transaction has crashed, so always be aware of that.
Kerry N. Greenwald
NMLS # 70269
Sr. VA Loan Specialist
360.571.LOAN (5626)
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