Short Sales: How short sales affect home values in the neighborhood

By
Real Estate Agent with Re/Max Metro Real Estate Services
- Short Sales and foreclosures have a big impact on home values. But, how they affect them varies dramatically. Every short sale helps stabilize the housing market. The reason is because short sales sell for much more than a foreclosed property does. Most short sales have a homeowner who still lives there. The homeowner has kept the home in good shape. Discover how other sellers successfully did a short sale and request a free consultation by clicking here. They mow and water the lawn, trim the bushes, and keep up on the house. Now, let's contrast this with how banks keep up on their foreclosed properties. A bank usually takes 2-6 months to put a foreclosed property up for sale. Sometimes they take even longer. They usually do not turn the power until the home is listed. So the house sits empty. In the summer mold will grow on the walls inside. In the winter water pipes can freeze and break. Water may even leak all over the house. The lawns are rarely watered or mowed. The homes are simply not kept up. As a result they sell for substantially less than a short sale or traditional sale. Here is a good example. A house was listed for sale as a short sale. A $310,000 offer was obtained. The short sale was not approved. The home was foreclosed upon and sold as a bank owned property. It sold for $230,000. Buyers know that they can get a better deal on a bank owned home. So they start their offers at a lower price. The bottom line is that short sales help support home values. So the next time you see a short sale seller, thank them for supporting home values, and as a result the entire economy. Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at paul@paulflores.com. I will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 714-863-8939. Discover how other sellers successfully completed a short sale and request a free consultation by clicking here. Thinking about a loan modification? Our Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy. Thanks for reading this, Paul Flores. Paul is a Real Estate Broker at Re/Max Metro Real Estate Services. Phone: 714-863-8939. paul@paulflores.com. ? View My homes for sale at www.paulflores.com. Short Sale Realtor. Short Sales. Realtor. Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Flores's personal views and do not reflect the views of Re/Max Metro Real Estate Services. This information on how short sales affect home values in the neighborhood is provided as a courtesy to our viewers to help them make informed decisions.
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Rainmaker
526,160
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Paul,

Great post. Banks should expedite short sale processing. It mitigates their losses, stabilizes values in the neighborhood so banks will lose less on future short sales, and puts the seller back in the home buying market much faster.

In your example the bank, by turning down a short sale, lost $80,000 more than they should have, not including additional holding costs and legal fees.

All your posts are extremely insightful and I am subscribing to your blog.

Oct 19, 2010 05:49 AM #1
Rainmaker
226,988
Bob Marsh
Warm Weather Real Estate - Mesa, AZ
Broker,480-529-2936, Warm Weather Real Estate

Paul, although short sale prices are somewhat higher than foreclosure prices in MOST cases, had the first short sale not been negotiated, we may not have to stoop to sell any homes at salvage prices anywhere. 

It breaks my heart to see the American dream of home ownership so devestated by what's going on in the housing market. 

Contastingly, when a  common stock is subject to future decline in value, the SEC says No Short Sales and suspends trading until the crisis is over.

As REALTORS we owe it to our clients to get this market turned around with talk of home ownershihp pride and value and maintain the market through tough dealing, not stabilize it short of wherever it may have been in the past by giving away equity in the name of bailing out a distressed home "owner".

I understand what your post is trying to say, but there is a better way. It may not feel as good, but there is a better way.

Oct 19, 2010 06:03 AM #2
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Rainer
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Paul Flores

Short Sales - Anaheim Homes, Anaheim, CA
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