Feb 12, 2008
Short Sales Are Raising In Numbers For Distressed Properties
Apart from the regular options of listing their properties for sale through MLS, FSBO and Flat-fee brokerage arrangements for home sellers on the one hand and prospective home seekers on the other, there is a new dimension to the real estate activity emerging recently. It is now common knowledge that foreclosure of properties is sweeping the nation through out and the burden is shouldered heavily by the home sellers. Selling a home and selling it for the right asking price have become difficult propositions, whatever way of advertising the property is chosen for – MLS, FSBO, flat-fee brokerage listing. This is the direct result of foreclosure properties flooding the market with prices that are a fraction of their real value.
The legislature has recognized the woes of home owners and various steps have been taken to mitigate the grievances steadily, though slowly. One among the same is encouragement of short sales of properties by distressed home owners with the consent of the mortgage lenders and thereby avoids foreclosure of their properties. A further step in this regard is forgiveness of outstanding loan representing the difference between sale value and the actual amount of loan. Such forgiven loans are exempt from income tax calculations of the home sellers, which were not so before, and this is really a welcome relief for millions of distressed home owners.
The short-sale of properties gives another venue open for home buyers, in addition to the MLS, FSBO and flat-fee brokerage sales, towards acquisition of properties well below their value in the open market. The advantages are more in number – urgency and time limit for effecting the short-sales; best bargains for even good properties in prime locations when they fall into this segment; flexibility in negotiations for closing prices, down payment and closing costs with the lenders, who will be too willing to dispose of the property quickly and retrieve their money rather than going into the ordeal of foreclosure process. In short-sale of properties thus a win-win situation is in the offing for the home owner, the mortgage lender as well as the home buyer since all the three parties are happy.
For restricting the growth of innumerable foreclosure listings in every part of the country, which were putting pressure all-round on home owners, lenders, courts, recorder offices and other real estate related service providers, short-sales are a great relief really. As the availability of foreclosure properties is adversely affecting the asking prices of home sellers, through MLS, FSBO and flat-fee brokerage sales, they should also feel safe and burst out a sigh of relief once these short-sales grow in large numbers.
