First-time homebuyers are growing tired of short sales, which take nearly 17 weeks to complete, according to the latest Campbell/Inside Mortgage Finance
While first-time homebuyers acquired 54.1% of all short-sales in November 2009, the segment's share of acquisition activity fell to 39.7% in August with many buyers losing interest due to several factors slowing down the process, the Campbell/Inside Mortgage Finance survey showed. The August figure represented a "three-month slide and was the lowest level for first-time homebuyers ever recorded in the survey" of 2,500real estate agents.
The short-sale process is often delayed due to paperwork issues, challenges coordinating with multiple investors, slow appraisals and understaffing at mortgage servicing outlets, according to the survey.
Short sales do maintain some allure for first-time borrowers because the generally sell at prices 27% lower than non-distressed properties, the report said.
California remains a hot spot for short sale activity, with these transactions representing 31% of all home purchases in the Golden State in August.
In many cases, first-time buyers are making multiple offers on short sales to try and expedite the process, according to the Campbell/Inside Mortgage Finance survey.
Write to Kerri Panchuk