WHAT IS A SHORT SALE?  A home offered for sale at a price lower than what is owed.

WHAT CAUSED THE SHORT SALE MARKET?  In my opinion most short sales in this market cycle  occurred due to lax lending standards, including adjustable mortgage rates. However, the trend for jobs going to overseas countries, forces many homeowners to face  job loss either for themselves or a family member.  A small percentage may be due to other personal unforeseen loss.

Many home sellers prefer to sell their home "short" rather than resorting to foreclosure.

FORECLOSURE: By most accounts those homeowners who are in the foreclosure process remain unable to afford their home and will unfortunately still be foreclosed upon.  The lending institutions have a huge responsibility to follow all applicable federal and state laws throughout the foreclosure process.  In 2010 Bank of America, GMAC Mortgage and others halted foreclosure activity – including the sales of their bank-owned properties, to ensure that their processes are being handled properly and in accordance with the law. 

ECONOMIC IMPACT: The foreclosed properties selling in the current market cycle benefit of the world economy.  When lenders practiced unsustainable lending offers, the U.S. home prices rose to unaffordable levels.  The good news is that foreclosed homes sell for much less than the home prices offered to buyers during the housing bubble.  Now first-time homebuyers, investors, and second-home cash-buyers can purchase homes again.  Each time a foreclosed homes is sold, it can lower the average sales price of homes in the area.  The sales price average impacts all re-sales where foreclosed properties make up a sizeable amount of homes available for sale.  Home prices will remain affordable for a long-time to come.  Communities will not see their average sales price rise until the foreclosed homes supply has been absorbed.

Prices are down.  Sales are up and our escrow companies are busy!  Now is a great time to buy a home - don't hesitate when you find the right property because someone else is going to buy it if you don't.

IMPORTANT: Always consult a tax advisor for tax questions. Consult an attorney for legal advise. Brokers, Realtors and real estate agents do not have expertise in these areas.