Last year, I wrote a blog for realtor.com about the short sale process given that 2010 was being dubbed by the New York Times as the Year of the Short Sale. Much of the reasoning behind the title of the "Year of the Short Sale" is that - at the time - nearly 22 percent of homeowners were underwater on their home. With that many people underwater, how many options did they really have and the short sale process can definitely be appealing. And, according to Zillow, those numbers increased toward the end of the 2010 and currently around 27 percent of homeowners are now underwater.
So what is behind the short sale process?
By definition, real estate short sales are when a mortgage company or lender agrees to allow the homeowner to sell their home for less than what is currently owed on it. Rather than face foreclosure or bankruptcy, the short sale process allows the homeowner to get out of a financial obligation that could be such that their home value would never return to what was owed - while also allowing the bank to recoup some of the debt. This is where a real estate agent who understands the short sales process well can be of huge value, ensuring that your interests are represented during negotiations with the bank.
Trying to avoid the short sale process?
If you're trying to avoid the short sale process, homeowners have other options such as loan modifications, HUD counseling, or deed-in-lieu-of-foreclosure. Renegotiating loan terms can allow you to retain ownership of the home if that is something of interest. And many banks are interested in avoiding foreclosure however they can, especially in Arizona where we had the second highest rate of foreclosed home in the nation for 2010.
As always, I recommend using a trusted real estate expert who can help guide you through the short sale process. If you're considering buying, selling, or short selling a home, please contact me. I'm here to help.
The short sale process can help sell your home