If I seem to be fixating on short sales lately, it's for a reason.  Think there aren't many foreclosure or short sale properties in the Orenco Station-Orenco Gardens-Bethany-Sunset Corridor, in all of the West Side, in fact? Don't bet on it.

Part of my growing obsession is because I can do them better than most agents, although, like most agents, I've been avoiding them.  That's because they have to be approved by the lender(s) holding the notes, and these guys move like a fat german Shepherd swimming through a lake of oatmeal.

A local branch of Fidelity Title company recently hosted a CE class on short sales. One of the data points that struck me was the volume--nearly all of this branch's current escrows were short sales, but slightly more than 60% were closing. That means 40% were not.

The reaction among the agents gathered around (probably twenty or so) was a collective groan.  They knew the success rate.  Many of them said they avoided short sales just for this reason. Their buyers would become impatient at the inordinate time if took for the banks to approved the sale.  Listing agents had the same complaint. Short sales require several times the amount of work as normal ones, yet all too often, the transaction doesn't close, the buyer doesn't get a house, the seller stays stuck, the banks gets some REO and the agents don't get paid.

In all the government bailout talk, why isn't someone  demanding more timely closings of short sales--say, 40 days? It's generally accepted that homes in foreclosure are creating a market glut, which agents almost anywhere know anecdotally to be true. Don't lenders realize that liquidating this glut will cause lending money to flow back into the system, and quickly?

Instead, we watch the federal administration and congress argue over how many billions to dump into the financial system, how fast and where, money which banks can use to buy other banks, pay dividends to share holders or grant executive bonuses. The goal, they all say, is to get money into the system and get loans flowing again.

Even NAR (the National Association of Realtors) is pushing for federal freebies.  Realtors all got a call to action to support a series of steps to make the first-time buyers tax credit permanent with no repayment, and to get the feds involved in rate buydowns and creating mortgage funds at below-market rates. To me, these ideas just waste tax dollars and take away the risk inherent in buying real estate, which is what got the country in trouble in the first place. Can't NAR, of all groups, take an Occam's Razor approach that would create a win-win and not cost anyone any more money?

The real call to arms should be for the FDIC to urge lenders to approve short sales quickly so as to absorb excess inventory and get lending money back into circulation.  No freebies are required.  Stakeholders would just do what they were going to end up doing anyway, only faster.

Snarl, snarl.