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.