Today’s article comes to us courtesy of DSNews.com
According to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions, short sales accounted for a substantial 15.9 percent of home purchase transactions in January. This was well above the share of other distressed property activity – with damaged REO accounting for 13.4 percent of activity and move-in ready REO making up 13.8 percent.
The January figures represent a steady increase in short sale popularity. As recently as November of 2009, short sales accounted for 12.4 percent of the home purchase market, according to the Campbell report, behind move-in ready REO at 12.6 percent and nearly even with damaged REO transactions at 12.3 percent.
That’s a pretty significant number, again reinforcing the status of Short Sales / Loan Modification in the United States.
Short sales are an effective method of resolving mortgages in default, both for large lenders and for the government agencies supporting lenders’ efforts. Short sales typically result in lower lender losses and houses left in more saleable condition.
In addition, borrowers that agree to a short sale escape the bad credit marks of a foreclosure and can often buy another house with mortgage financing after only two years. For borrowers going though the foreclosure process, mortgage financing can be unavailable for a period of five to seven years afterward.
Sounds like what we have been saying! Making the case to the bank that they minimize their losses by accepting the short sale.
Short sale properties are most often purchased by first-time homebuyers, the January survey results revealed. Currently, mortgage servicer approval on offers for short sale properties can take several months, making these transactions difficult for current homeowners who often need to conduct not one, but two, transactions in quick succession to also sell off their current residence. In contrast, first-time homebuyers more often have flexibility around the timing of short sale closings.
This is a good blurb to keep in mind – although many times we are selling to investors, rehabbers, or landlords; selling to a traditional homeowner is certainly also an option – and their circumstance (first time homeowner vs. existing homeowners) can impact the complexity and time constraints on a transaction you might be working on.
Short sales are becoming particularly attractive in some of the hardest-hit housing markets. As DSNews.com previously reported, 21.1 percent of all existing-home sales in the foreclosure-ravaged Las Vegas area last month were short sales.
According to recent report from the local FOX news agency in Phoenix, Arizona lawmakers are currently considering a bill that would mandate realtors there learn short sale strategies. The state’s Short Sale Task Force is recommending that the Legislature require local agents to take 15 hours of short sale classes so they can successfully navigate the process.
We broke that news earlier as well – and this education can only help realtors to do their jobs.
Any comments or thoughts on the article? Share ‘em in the comments!
