Short Sales On the Rise
Short sales are becoming a more common occurrence in the housing market. A report released on June 30 by the Office of Thrift Supervision and the Office of the Comptroller of the Currency said short sales increased by 208.5 percent for the first quarter of 2009, compared to the first quarter of 2008. In June, the National Association of REALTORS® statistics showed that about half of all recent transactions have been a short sale (15 percent to 20 percent) or foreclosure (30 percent to 35 percent).
A short sale enables the current homeowner to help protect his or her credit and avoid foreclosure by selling the home for less than the amount owed on the mortgage. Short sale properties can be reoccupied quickly and help stabilize neighborhoods, preventing vacancy and blight. Both the buyer and seller need to consider the amount of time and process required to complete the sale. The transaction requires paperwork from the consumer, home valuations, approval from the mortgage servicer, and mortgage insurer, if applicable. Appropriate approvals are also required from the loan investor and the process may require coordination with the second lien holder, which may take additional time. Numerous participants are involved in a short sale. Short sale buyers cannot have a close personal or business relationship with the seller. Buyers are encouraged to obtain a credit-checked preapproval to help move the process along.
Lenders assist homeowners and real estate professionals with the appropriate resources to get properties effectively valued and listed, while collecting information needed to make a decision on submitted offers ahead of time. The lender ensures all parties involved in the short sale process are kept up-to-date at all times, maintain contact through this effort, work proactively to facilitate the sale of the property and provide a quick turn time on offers.
If you're considering a short sale, I am a local licensed real estate broker that specializes in short sales and foreclosures and can help you understand your options.