Do you remember last year being the year of foreclosures? Well, this year looks like it is about to become the year of short sales.
In Phoenix alone, the amount of finished short sales, in which lenders sold homes for a lower mortgage value, went up by 60% at the end of 2009. Last month, bank-owned home sales went down by 25% compared to a year before, as traditional sales went up by 9% and short sales went up by 16%.
Agents of real estate have complained for years about the trouble in pulling off short sales since tons of third parties could be involved – second and first mortgage holders and companies of mortgage insurance, for instance. Locking up short sale approvals could take months, though, and make possible buyers leave lower appraisals or deals to ruin the deal.
Unfortunately, this gets on agents’ nerves because such short sales allow banks to stay away from foreclosures and deal with property management on their own. This oftentimes ends in better prices compared to what the bank could receive if properties foreclosed.
There have been predictions that short sale upticks will occur because total sale shares could offer up unexpected home price lifts this 2010. We can only hope that this is true.