A “short” sale can actually take a long time to transpire. Are they truly the deal of the century, and are they better than foreclosures or standard sales?

 Doug Hill blogs about how to know whether or not a short sale is the right transaction for you.

“Buyers perceive short sales will be in better condition because they are sometimes still occupied by tenants and/or the owners, and sometimes still furnished and being maintained.

There’s something about a vacant, bank-owned, home that sends some home buyers, especially first-time home buyers, running for the hills.”

Short sales are here to stay for now, in fact, many real estate experts predict their numbers will rise this year. Are they the way to go for you?

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But for as much as the foreclosure filing statistics can be astounding — over 300,000 homes were served last month alone — the prevalence of foreclosures depends on where you live.

Bob Phillips shares the statistics behind the numbers of foreclosures around the country, and what they mean to homeowners and potential hombuyers.

“Just because foreclosures are concentrated geographically, that doesn’t make them less important to homebuyers around the country.

There’s been more than 1.4 million foreclosure filings in the last 12 months and that’s a figure that can’t be ignored.”

If you want to be able to take advantage of the first-time home buyers tax credit, and you are serious about looking into foreclosures, it’s probably best to start your search soon.

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But they are also a complex and complicated transaction that requires some knowledge and research. As with any real estate transaction, make sure you are working with a skilled and professional REALTOR®.

In addition, Karen Schlosser blogs about what you need to be sure to ask of a listing agent should you find yourself interested in a short sale listing.

“Before embarking on viewing or purchasing a short sale listing, the listing agent should be asked questions to obtain as much information about the status of the short sale as possible.

The purpose of asking questions ahead of time is to help assess the status of the short sale and, hopefully, set realistic expectations of the prospective transaction.”

A short sale could be an opportunity to get a potential homeowner into a great property. And any listing agent will most likely be more than happy to supply you with any information about the property that you may need. The best buyer is an informed buyer. So know what questions to ask.

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But as David Welch tells us, this may not necessarily be the case. There are definitely deals to be found with these types of properties, but should someone in the market to buy a new home stay particularly focused on REO, foreclosure and short sales only?

David Welch gives us the breakdown between REO, short sales, and what some call “normal” sales.

“The bank-owned and short sales just tend to be concentrated in lower price ranges. While half of all “normal” listings are priced above $249,000, only about 10 percent of all the closed sales are above $249,000.

Around 7 percent of bank owned properties for sale exceed that number, and just under 13 percent of short sales are currently on the market for $250,000 and above.”

It is still a buyer’s market, so no matter what type of property you find, with a trusted and experienced REALTOR® by your side, you just may be able to get yourself a great deal on the home of your dreams.

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Short sales are very commonplace in the real estate industry these days. And while the process can be very complicated and intimidating, experienced REALTORS® handle them frequently, and can really make the experience a relatively easy one for those who need it.

Normalina Martin gives us the rundown on the new guidelines that will assist you, should you be in the market to consider a short sale.

“Under HAFA, forgiven debt due to a short sale will not be taxed if the amount of forgiven debt does not exceed the debt that was used to acquire, construct, or rehabilitate a principal residence.

Please also know that while the debt will be forgiven, the short sale will be reported to credit agencies and have some degree of negative impact on your credit.”

For many homeowners, a foreclosure is a necessity. But an experienced Realtor can help you navigate the real estate process, and hopefully show you some worthwhile alternatives. And now, perhaps the Treasury’s new HAFA guidelines can help even more.

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I am interested in buying a house from a friend that is about to go into foreclosure. The bank told my friend just to bring someone in if they are interested, and that they don’t need to involve any REALTORS®. Is that even possible? Also, I don’t know whether I can get approved for a loan since I have a mortgage now that I am paying on. I do have pretty good credit though. Will I have to sell mine first?

-Annie

First, I would suggest speaking with a lender and get pre-approved to see if you can carry the two mortgages. I would discuss my options on your current home with the lender. Are you able to carry two mortgages? If you are able to carry both mortgages, and you meet the debt-to-income ratio, are you planning on using one of the homes for an investment property, or are you planning on selling your current home down the road?

After speaking with a lender, and deciding what your plan is for your current home and the one you are considering purchasing, I would then contact a Realtor that is knowledgeable in short sales and foreclosures.

I would highly recommend using a Realtor to represent at least you, and maybe the seller of the home you are looking at purchasing. The asking price that the seller’s give you might not be the amount the bank will accept. Also, the amount the seller’s are given might be what is needed to pay off all of the debt on the house. With today’s market, the price for the home might be above what the market is bringing right now, and you don’t want to overpay for a property.

I would not cross this bridge alone. I would find an agent you can trust and who has knowledge in the foreclosure and short sale industry. I would interview a few agents to get a feel for their knowledge and experience in this area. If you are ok with dual agency, that agent can represent you and your friend (the seller) through this transaction. They will be able to help make sure the offering price is fair in today’s market, and they can help you get all of the proper documentation filled in correctly in addition to doing the leg work and follow up with the bank .

Mabel Davis is a REALTOR® with Keller Williams Elite in Pennsylvania.

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What is a short sale?

A short sale is when you owe more on your home than its actual value. So what that means is, you have to go the bank and you can ask the bank to allow you to sell the house for less than what’s owed. There are a lot of tax implications and other things that need to be considered before undertaking a short sale, so contacting a licensed REALTOR® and also talking to a certified public accountant is a very important process in understanding a short sale, and that can help you avoid a foreclosure.

The short sale market seems to be driving the San Diego market. We’re actually getting more short sales now and less foreclosures because people are starting to understand that they can avoid hurting their credit as much. Short sales can have less damage on your credit than a foreclosure. So you’re seeing a lot of people pursue and start asking questions about what is a short sale, and making sure they understand it. It’s just one of the options in this kind of crazy market outside of bankruptcy, foreclosure, short sale, lien/deed-in-lieu of foreclosure. It’s one of those options that is usually the best option, and that’s what’s driving the San Diego market.

Jonathan Schneeweiss is a REALTOR® and owner of Schneeweiss Properties in Austin, TX.

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Foreclosures have had varying effects on the economy. We have seen markets catch on fire with investors and first-time buyers rushing to take advantage of the discounted properties. And we have seen markets with streets lined with foreclosures that have sat vacant for months. For the most part, foreclosures have hurt homeowners’ wallets as they lose their investment to the bank. Yet, as banks struggle to catch up with the thousands of homes in foreclosure, some homeowners are taking advantage of the free rent and stimulating the economy.

Allan Glass blogs about November’s foreclosure report and the stealth stimulus:

“October marks the first month in the past four where actual foreclosure sales, which send properties back to banks as REO, have increased. Yet the 22.24 percent increase from September 2009 and 20.95 percent increase from October 2008 are still 42.56 percent below peak levels (July 08). The report suggests a ‘foreclosure limbo’ where some homeowners hope for loan modifications, some pursue short sales, while others simply wait for that knock on the door letting them know it’s time to leave.

These extended foreclosure periods may also have another effect on the overall economy, a ’stealth stimulus’ if you will. As homeowners await their fate, not paying the mortgage or rent, some families are finding the discretionary income for additional consumer purchases. Consumer electronics, dining out, a night at the movies and deluxe cable packages are just a few of the consumer items for which defaulted homeowners are now finding the discretionary funds.”

Glass continues his post by pointing out that the slow-moving foreclosure process is due to banks being overwhelmed and underequipped. If banks were able to move faster and more efficiently, investors could take advantage of homes coming on the market, and homeowners living rent free would be forced to leave a lot sooner.

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Foreclosures have had varying effects on the economy. We have seen markets catch on fire with investors and first-time buyers rushing to take advantage of the discounted properties. And we have seen markets with streets lined with foreclosures that have sat vacant for months. For the most part, foreclosures have hurt homeowners’ wallets as they lose their investment to the bank. Yet, as banks struggle to catch up with the thousands of homes in foreclosure, some homeowners are taking advantage of the free rent and stimulating the economy.

Allan Glass blogs about November’s foreclosure report and the stealth stimulus:

“October marks the first month in the past four where actual foreclosure sales, which send properties back to banks as REO, have increased. Yet the 22.24 percent increase from September 2009 and 20.95 percent increase from October 2008 are still 42.56 percent below peak levels (July 08). The report suggests a ‘foreclosure limbo’ where some homeowners hope for loan modifications, some pursue short sales, while others simply wait for that knock on the door letting them know it’s time to leave.

These extended foreclosure periods may also have another effect on the overall economy, a ’stealth stimulus’ if you will. As homeowners await their fate, not paying the mortgage or rent, some families are finding the discretionary income for additional consumer purchases. Consumer electronics, dining out, a night at the movies and deluxe cable packages are just a few of the consumer items for which defaulted homeowners are now finding the discretionary funds.”

Glass continues his post by pointing out that the slow-moving foreclosure process is due to banks being overwhelmed and underequipped. If banks were able to move faster and more efficiently, investors could take advantage of homes coming on the market, and homeowners living rent free would be forced to leave a lot sooner.

Click through to read Allan Glass’ full post.

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The popularity of foreclosures and short sales has demanded that REALTORS® learn how to work with banks to close on a home. Some Realtors are having success with the banks after learning how the system works and making contacts. But most are finding the lengthy  foreclosure process to be frustrating due to the mishandling of paperwork by unqualified bank representatives. Thankfully, one of the biggest holders of foreclosure properties has decided to update their foreclosure filing process.

Scott Carrier posts an article from ReoTrans.com that talk about the new process:

“I received this article today from ReoTrans.com concerning B of A finding a way to process short sales quicker! Foreclosures are processed through sites like ReoTrans.com to speed things along. Hopefully it will do the same for short sales.

A representative from B of A recently told the paper that they were using the Equator platform to manage the short sale process. ‘This is the first time that short sales have been handled through an electronic platform,’ said Equator CEO Chris Saitta. ‘With our new system, everyone works together in real time, dramatically improving communication and approval timelines for our client, its borrowers, vendors, and real estate agents.’”

For Realtors who are tired of sending and resending documents only to find out they were lost or never filed, an electronic system that updates in real time is like a dream come true. With a new, streamlined system, hopefully more Realtors can get into the foreclosure market.

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