Many people have heard the term short sale, but most are unfamiliar with its definition or process. Short selling has become more widely accepted in the real estate market in the past two years as a way to keep more distressed properties from entering into full foreclosure.

A short sale is when a buyer makes an offer to the loan holder for a lesser amount than what is owed. This is often done on homes that are in pre-foreclosure or are already bank owned. As an example, a homeowner owes 300k on the mortgage. A purchaser offers the bank 220k for the home as the final price. The lender than can accept or negotiate with the buyer.

To begin the process the holder of the mortgage must call the note holder and request a short sale package. This package of paperwork represents each step both buyer and seller must take to complete a short sale.

The mortgage company may request a hardship package from the owner. This package will include financial statements, tax receipts and affidavits from the current owners as to why they can no longer fulfill their obligations on the home. It is advised that this paperwork is returned immediately because processing on the lenders end can take several weeks.

The purchaser will need to provide the mortgage holder with proof that they can pay for the house immediately at the time of sale. This can be done with securing another mortgage or with cash. Either way, if the lender approves they must be paid in full.

A Brokers Price Opinion (BPO) must be completed on the home. This is where a certified realtor must come and evaluate the home for what it is worth on the current market. The lower the market value in comparison to the money owed, the more likely the lender will agree to the short sale.

Once the evaluation has been completed and all the paperwork submitted both buyer and seller must wait for approval from the lender. At times, the lender may counteroffer the buyer, but in the current market conditions this is rare.

When all negotiations are completed and paperwork signed, the house transfers over to the new buyer. Short sales can take anywhere from 1-4 months to complete. The time line will depend on how quickly paperwork and evaluations are completed and how fat the lender moves on the issue. Short sales should be an early consideration when a property is starting to become distressed. A short sale can prevent foreclosure and other legal proceedings.

Recent data from the national Association of Realtors has shown that the first half of 2010 has shown a slight increase in short sales among at risk properties. A 2.3% increase is the average for the nation. While some areas have higher amounts, many areas are showing less than 1% increase.

Short sales have been promoted as an option to avoid foreclosure. Homeowners negotiate with the bank to sell their homes for less than the market value or the amount owed. As a way to keep more distressed homes from entering the market, lenders were encouraged to use this tool.

However, market statistics are showing that the process is not being utilized to its fullest, nor is it preventing foreclosures from occurring. These same statistics show that foreclosure notices reached over 1.9 million in the first 6 months of 2010 and that 1.6 million properties were affected.

Lenders are always leery to use this form of loss mitigation, and often the process is slow and grueling. Sales often take to long and the homes enter foreclosure proceedings. Many people find that negotiating with the lender, even with assistance, can be difficult.

Analysts are predicting that the later half of 2010 should show a large increase in the number of short sales that are approved. As banks and private lenders prepare to close their books for the year, the prospect of having too much inventory is frightening. In an effort to prevent this, it is anticipated that short sales will have a significant rise.

Current figures show that the remainder of 2010 does not look good for the real estate market. Year end sales are often lower, even during good times. One of the only ways to keep the foreclosure numbers down is to approve the short sales.

There are many realtors that are now specializing in this type of transaction. Distressed property specialists are the titles they are using. These realtors know and understand the process of the short sale. It is with great hopes that these experienced sales people will be able to change the course of foreclosures and encourage the use of short sales.

Short selling was, in the past, a very rare transaction. Now, with housing prices as low as they are and the amount owed against the homes so high, this process may be the only salvation an upside down mortgage holder has to avoid the foreclosure process.

Foreclosure statistics for the first half of 2010 have been released; the results are mixed. For the first 6 months of the year foreclosures were down 5 % from the previous 6 months. This is a good sign, showing that mortgage modification programs may be helping and that the economy may be turning around. However, these same numbers were 8% above the same time period for 2009, a bad sign that recovery may still be far away. The next six months will be the deciding factor if the housing market is improving or not.

The first 6 months of 2010 saw over 1.9 million foreclosure proceedings initiated. This staggering amount accounts for an average of 1 in 411 homes receiving notice. Some areas were much higher, while others reached a staggering 1 in 78 receiving notice.

When the foreclosure market is this high it is bad for new home builders and existing home sales. Foreclosures present good opportunity for investors because they drive the prices low on the homes. Builders and other home owners are required to drop their prices to compete with the flood of bad mortgage homes.

Freddie Mac reported that in the second quarter, the amount of bad loans actually decreased. However, the full two quarter total is higher than expected and larger than the figures for last year.

Senior economists at several major mortgage lending firms have stated that the trend is bound to worsen as the end of the year approaches. Foreclosures are expected to increase through the remainder of the year and sales are not expected to increase. New legislation attached to the recent financial regulations bill signed into law by the Obama administration has many new mortgage related regulations. Banks and lending institutions will become even stricter with lending policies in an effort to comply with new regulations. This will decrease the amount of sales. The last six months of the year are generally slow for sales anyways. With school starting and holidays approaching people are less likely to initiate a move.

Builders have found that the flood of foreclosure properties on the market is stifling their business. Many of the homes that have been foreclosed on are nearly new and people are able to purchase them far under market value. The competition has closed many builders and created a large list of layoffs.

California, Arizona, Nevada, Florida and Michigan continue to have the highest foreclosure rates in the country. States that are not battling high unemployment have lower foreclosure rates. Proof that foreclosure and unemployment go hand in hand.

There are many reasons home owners may need to sell their home fast. As we all know life brings many challenges our way and owning a house can complicate those challenges even more. A few reasons people may need to sell their house fast is because they need to move out of state or out of the area for a job relocation, they could need to sell because they can no longer afford the home and do not want the house to go into foreclosure. If you are needing to sell your house fast receive a free, confidential, no-obligation offer from http://www.ExpertHomeOffers.com

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Approval of the extension of the Home Buyer Tax Credit, for first time home buyers, has given home buyers until September 30, 2010 to arrange a closing and still qualify for the $8,000/$6,500 tax credit. The original deadline was June 30, 2010 but due to data released in May 2010 revealing sharp declines in sales of existing and new homes and continued foreclosure activity, the House passed a new bill, the H.R.5623, extending the home buyer credit for new and existing home buyers.

Home buyers that have entered into a contract on a home purchase by April 30, 2010, but having a problem setting up a closing before June 30th, the required 60 days, now has an additional 90 days to close and qualify for the Home Buyer Tax Credit. The new bill does not allow an extension for home buyers to enter into a contract. It only extends the deadline from June 30th to September 30th. The extension is estimated to help about 200,000 home buyers that were concerned that they had already signed a purchase agreement and would miss the deadline to close the contract.

Form 5405, the First Time Home Buyer Credit and Repayment of the Credit, must be filled out along with at least one of the following documents: The settlement statement including all parties’ names and signatures, if required by local law, the property address, the sale price, and the date of purchase. Form HUD-1, Settlement Statement.

Mobile home purchasers are required to obtain a copy of the signed executed retail sales contract showing all parties’ names and signatures, the property address, the purchase price and the date of purchase. Newly constructed home purchasers are required to obtain a copy of the certificate of occupancy from the county and city offices showing the owner’s name, the property address and date of the certificate. Existing home buyers must provide proof that they lived in their old homes for five years during the eight-year period ending on the purchase date of the new home, by providing Mortgage interest statements, Property tax records or Homeowner’s insurance records.

To claim the Home Buyer Tax Credit on a qualifying 2010 home purchase three options that can be utilized. Use the Form 1040 for tax-year 2009. You will not be able to file electronically, but taxpayers can still use IRS Free File to prepare their return. You must print the form out and send it to the IRS, along with all required documentation. It is best to choose Direct Deposit for any refunds. There is an amended return, Form 1040X, for those that have already filed a return for 2009. If you need additional time you can wait until next year and claim it on a 2010 Form 1040.

Steps of Foreclosure begin when the lender is no longer willing to work with the property owner to bring the loan balance to current status. While there is no concrete law regarding the number of missed payments which must have occurred, some lenders are willing to delay longer than others hoping to avoid the cost, time and paperwork involved.

Although foreclosure allows the lender to claim title and force sale of the property based on loan default, there are foreclosure steps which must be followed

Default Notice requires the lender to inform the property owner by letter stating foreclosure is pending and must include the number of payments in arrears and balance owed. There is no requirement that this letter be sent be registered or certified mail.

The only option the borrower has at this point is to contact the lender in an attempt to bring the loan into current status. Unless being removed from layoff is imminent for the property owner, or the area real estate market is slow, steps of foreclosure will not of interest.

Acceleration Notice is required by law in most states. This documentation must clearly advise of mortgage termination and must offer a 30-day grace period for the total balance to be repaid. This communication may or may not include notice of intended legal action. While this notice may be sent by regular mail, in most cases it will be in the lender's interest to obtain signed proof of receipt of the letter.

Short Sale is an option lenders may use for steps of foreclosure. In this process, with the knowledge and consent of the lender, an investor or realtor may approach the lender offering to purchase the property. This offer will usually be very low or a rock-bottom figure but is of benefit to the lender and the investor since the property will not be exposed as a 'foreclosure'; thereby allowing the investor to profit from the resale and the lender not to incur additional expense.

Public Auction takes place on the courthouse steps of the town or county in which the property is located. The opening bid and bidding increments are at the lender's discretion with the opening bid usually set very low. The lender knows that if no bid occurs, the property title automatically reverts to him, and that the borrower now owes auction and attorney fees in addition to the balance.

There are a variety of different ways that you could use to determine your homes value. It is good to note your house's value can change throughout the year. A few of the reasons people would need to know what their house is worth is to sell their house, refinance, or to calculate their net worth when strategies retirement.

There are a few ways to determine your house value:

• Hire a certified home appraiser to give you an appraisal on your home. Hiring an appraiser is also an option that will lead to the largest expense. 
• Call a local realtor who you may be interested in listing your home with now or in the future. Realtors are typically good resources to use for determining your house value. I would just recommend to use a realtor who is active in the market and who you trust. 
• Use a website service like Zillowto get an idea of your homes value. Websites like these use a confidential (proprietary) algorithom to calculate home values for every house in the nation. Because there is no real estate expert who is actually walking through your home this option for determining your homes value is less accurate but can give you a ball park range of the value of your house. 
• Real estate investors can be a good source to determine your homes value. Real estate investors exist in every major metropolitan city in the nation and like realtors they are active in the real estate market. Real estate investors are in the business of purchasing homes to either resell or hold for long term financial growth. Investors will typically let you know your homes value when offering to purchase your home. The price they offer will typically be below current market value but you can sell your home quickly.

There are many factors to consider when determining what your house value is. A good home value analysis should incorporate what other houses in your local neighborhood are selling for and try to find the house most comparable in size and age to your house. Other factors that should be considered are home improvements, local schools, shopping centers, ect.

If you are not quite ready to have a home appraisor or a professional realtor come to your house, you can do a lot of the research yourself to find out what your house value is currently worth with online tools and your tax assessment. You can also look in your local newspaper to find out what current homes are selling for (asking price). You should try to find houses that are very similar to your house in age, square feet, lot size, bedrooms, bathrooms and number of garagees. It would be best to try and find houses that are closest to your neighborhood.

Another way to find out your current house value is to drive around local neighborhoods comparable to the neighborhood where your house is located. A lot of the time there are flyers underneath the realtor sign on their property that will give you the listing specifics. If there is no flyer available write down the name and number of the realtor, and call them and ask them specifics about the house that is for sale.

If in doubt about your house value, I suggest using a local home buyeror real estate investors who can give you your homes value and an offer for your house if you are wanting one. Similar to using a realtor there is no cost for this service and you will get a good idea of what your homes value is.

For the first quarter of 2010, there was a 75% increase in the number of people completing foreclosure prevention programs in this country. Even more surprising is the fact that the number of loans that were 60 or more days delinquent fell for the first time in two years this past quarter. These are astonishing facts, considering the large number of people losing their homes to foreclosure around this same time.

Mortgage loan modification plans are becoming a popular way to prevent foreclosure, as evidenced by the above numbers. Within the last quarter of 2009, there were over two-thirds of loan modifications that lowered a borrower's payments by over 20%. Mortgage loan modification plans are giving people the help they need to stay afloat in this rough economy.

To sign up for a mortgage loan modification plan, there are certain requirements that must be met. It is important to note that a loan modification plan is not the same thing as a loan refinance plan. The Fannie Mae and Freddie Mac loan modification program is actually intended for people that have stayed current with the payments of their home. While refinance can apply to any type of loan, this program only applied to Freddie Mac or Fannie Mae secured loans. This mortgage prevention plan also helps homeowners that may have a second mortgage on a home.

To qualify for the mortgage prevention plan, one must not have a payment that is 30 days overdo within the last 12 months. In addition, the home must be the place of primary residence for the borrower seeking to participate in the loan modification program. A homeowner must also not exceed certain amounts owed on a home. The homeowner must not exceed $729,750 dollars owed on the home. A person must also demonstrate some sort of hardship to be able to qualify for the loan modification program, such as a lowered income, very expensive medical bills, or a loss of job due to the economy.

To request a loan modification, one must go through the first loan mortgage servicer. This is the entity that receives mortgage payments on a monthly basis for one's home. One can simply call the loan mortgage servicer and ask to apply for the loan modification program. After, the servicer will initiate the application and send the necessary documents to the borrower through mail.

Overall, the number of people taking advantage of loan modification programs is increasing on a quarterly basis. These programs are helping people keep their home, rather than put them into foreclosure.

The Federal Housing Finance Agency has just issued their monthly report about house value and sales. The report shows that home prices increased by 0.8 percent from March to April 2010. This increase is a good sign of recovery in the housing market.

The report shows that the increase in house value i may be due to the deadline of the first time home buyers programs that ended April 30th. To qualify for the credit, buyers must have been locked into a valid home purchasing contract prior to this date. The report also shows that the incentive for down payment assistance may have also helped raise the bids on the homes.

The FHFA bases their monthly reports on data collected from homes that have been purchased with mortgages backed by Fannie Mae and Freddie Mac. They do not include any data from private lenders. The information is also seasonally adjusted and is a combination of all the data throughout the United States. Some areas experienced higher price increases, while others saw prices drop. The information in the report is an average of all this data.

Current data shows that the largest increase in home prices happened in the western part of the United States. North and south western states saw a large increase in house value, topping 1.7% in one month. North eastern states on the other hand lost value. Home prices in the south east showed neither an increase nor decrease in value. Data also shows that the increase is equivalent to the same time period in 2004, before the real estate boom. This is another indicator that the real estate market is leveling out and not continuing to fall as some have speculated. The agency believes they will see the same results on the May data.

The Federal Housing Finance Agency provides oversight, supervision and regulation over Freddie Mac, Fannie Mae and the Federal Home Loan Banks. Home value is determined by the amount that the house sold for in comparison to asking price or the amount of debt that was owed on the home. The next report is due out on July 22, which will show data collected from May. The market will be carefully watching this report to see if the end of the tax credit means the housing market will stagnate again.

It is the FHFA’s position to ensure that the mortgage market remains liquid and stable and that affordable housing remains available on the market.

If you need some assistance in selling your home, odds are that your considering contacting a realtor. Also, you are probably wondering what will be the realtor cost. This will vary with different realtors and agencies, and you will decide all of this and put it into a contract. Sales are statistically proven to be more successful when a person involves a realtor in trying to sell their home. The advertising and networking a realtor does is vitally important, especially in this economy. You may not want to give up that 6% or 7% of revenue, so you have to answer this question to yourself: How bad do I want to sell my house?

You may be thinking " I can sell my house by myself". Well maybe you can, but maybe you can't. You should also take into consideration that there are many things covered in the realtor cost other that go beyond just advertising and showing your home. A realtor does a lot more than take pictures and create fliers. Your realtor will be drawing up contracts for you, handling all of the paperwork, and also protecting you legally through the sale and closing process. They are professionally trained and have all of the necessary information and guidance that you will need to do things legitimately and legally. This is where the realtor cost is going to seem worth it.

If you are unhappy with your realtor, or if you are still having a hard time selling your home, there are some negotiations that you may be able to make with your realtor. He or she may be willing to drop the percentage of their commission down so that they still get the sale, and you will then still get the amount of money that you're depending on. They may also assist you in home staging, or be willing to firmly negotiate closing costs to save you money. Together you can work out a plan, and agree on the cost of their services.

The cost to sell your house is going to depend on each individual agent or company, so call around and check prices. You will have different listing and time options. If you don't like your realtor after and allotted time, switch to a different one. Evaluate each offer and see which will best represent and sell your home. The services of a realtor will be money out of your pocket, however they are usually worth it.