Oh yes, we all better get use to short sales since they will be around in large volumes for at least the next three years. In the not so distant past, agents and buyers have shunned the short sale property's as the red headed step child of the sought after REO property (a foreclosed home). With the REO's now selling at a break neck speed in Prince William and Fairfax county short sales have stepped into a more favorable light than in the past.
......A side note for those who have not read my previous blogs, if you are not at the court room steps buying property then the correct term to use is Real Estate Owned or REO. A foreclosure is the legal proceeding initiated by a creditor to repossess the securing collateral for a loan in default.

A short sale is when the owner is selling their home or property for less then what is owed on the loan secured by said property. The challenge with this process is the fact that the mortgagee or lender has to approve the acceptance of less money then what is owed to them to release the lien. This process can be a very long one, for more on how long a short sale can take in Northern Virginia refer to my article Please Do Not Give Up: Short Sales Do Close.

There are two reasons that short sales have become more of a viable option for buyers and agents over the past few months in Northern Virginia. The first one is the fact that REO's appear to be in a shorter supply recently because they are so aggressively priced which brings out deal seeking investors or buyers. This causes them to generate multiple offers and sell fast, and creates more aggressive buyers who loose out on multiple properties. With most buyers once they have lost multiple bids on real estate they become more aggressive with the next property negotiation. This is good for our future economy as long as it does not create another irrational exuberance that got us here in the first place. These buyers look more to other options to purchase and low and behold short sales become that option.

With short sales becoming a better option for distressed sellers then foreclosure, more are being listed everyday. This combined with the fact that buyers are willing to make offers on short sales, aka pre-foreclosure, banks have been forced to approve more and more short sales. This leads me to the second reason why these sales are a more viable option for buyers, banks are getting better and more open to approving these deals. When the real estate market started to collapse banks and/or lenders did not know how to deal with short sales nor were they staffed to handle the volume. Now that we are several years into this mess, the banks/lenders have staffed the loss mitigation departments and have processes in place to approve these kinds of deals.

The real estate market in Northern Virginia as a whole is near or at the bottom when it comes to prices. Refer to my article Home Prices Hit Bottom, so I can impress upon you the fact that real estate is local. There are still many people who are out there making their payments but are very upside down on the value of their home. This is due to the fact they pulled money out of their equity or purchased the home when prices where at or near their peak in 2006. Prices will eventually start to increase again at a normal rate so unfortunately many people may be upside down for several more years. This means over the next few years the owners who get a divorce, transferred, or loss of a job will have to short sale. All the professions associated with real estate including buyers and sellers will have to become familiar with this kind of real estate transaction because they will be around in large numbers for a while.

Joey Remondino is a full time Realtor and Broker with StoneHouse Realty Inc. Specializing in residential homes in Northern Virginia including Manassas City, Manassas Park, Prince William, Fairfax, and Fauquier County. Trained and experienced expert in Relocation, Short Sales, REO's, foreclosures, investments, and any other residential real estate. Joey can guide you through the home buying or selling process.

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