I see a problem coming down the road in the Phoenix Real Estate Market, my investment strategy is more about loss prevention than about making big wins. I like to see the risks and be prepared for them. This one is a risk for short sellers and an opportunity for normal sellers.
What in the world am I talking about? Well, let’s refresh that the Phoenix Real Estate Market is on fire. We’ve established through this site we’re seeing an incredibly low inventory. ARMLS® recently posted stats that show we’ve been appreciating for the past 7 months. That’s great for everyone right, well, what’s great for one will not be great for another.
So if you are trying to get in under the wire for the Mortgage Forgiveness Debt Relief Act is expiring at the end of this year, remember that it can take 3 to 6 months to negotiate with the bank to approve an offer, that puts you to getting an offer very soon.
But, the banks are going to be less inclined to accept your short sale. Why is this a problem now? Well, think about it, if the market is improving, they will get more money than your offer if they Foreclose on your home (about 3 to 6 months). In the bank’s strange mind, they will find it better to proceed with the Foreclosure on your home than to accept the short sale, even if the offer appears to be at today’s Fair Market Value.
So right before the end of the year, short sales will become harder to complete as desperate sellers are trying to work with buyers that don’t want to take on the risk of buying a home that may not close before the deadline and the sellers will cancel if they miss the end of the year deadline.
Now the opportunity for normal sellers is that demand for your type of listing will actually increase because it will represent less risk and less time and this should cause a premium price around your listing.