That is a misconception and that’s why a lot of investors are letting their homes go to foreclosure when they have the option of a short sale.

Currently there are a lot of foreclosures in the hands of the lenders and considering the amount of monies the lenders loose to put a property in foreclosure, the lenders will be more than happy to consider investors short sale and cut their expenses.
In Orange County, FL there are 1155 active bank owned properties out of which 738 are single family home, 311 condos and 79 town homes. Since October of 2009- 4271 bank owned properties were sold out of which 2416 were single family homes, 1529 condos and 240 town homes.

Osceola County follows with 397 active and 1393 sold bank owned properties since October 2009. Here too the lead in active and sold is maintained by single family homes.

By the current numbers, a lot of sellers realize now that short sales are more beneficial than foreclosures. Orange County, FL has 3645 active short sale listings versus 1155 active bank owned listings and Osceola County, FL has 1382 active short sale listings versus 397 active bank owned listings.

A short sale is possible when there is a financially reasonable situation and when the lender losses less money by doing a short sale instead of a foreclosure.

A foreclosure is very expensive for the lender and it is done only when the seller is not responsive. By responding to the lender notifications, lender’s attorney and court papers, the seller shows that he is interested in working on the situation and seeks to resolve the situation by working with his lender.

So to all investors out there – Foreclosure is not your only option-Short sale is a better option and numbers are there to sustain it.

Sometimes buyers are willing to wait on what they believe is a good deal. Sometimes they walk away. Davis’s client, two aid workers currently stationed in Kenya, didn’t mind the 10 months it took to purchase the property. They bought the Silver Spring townhouse for $214,000. It originally sold for $380,000 in 2005 and had been on the market for 285 days.

Writing down loans is a tough business. Short sales involving home-equity lines and second liens often require the junior lien holders to write off the loans altogether. But when lenders hold on to offers, hoping that a better one will be presented, they risk not only losing the buyers, but that real estate prices will fall.

“We see this all the time,” Davis said. “Banks stop communicating as they wait for better offers. Then months go by.”

When an offer is finally accepted, if a home doesn’t appraise at the buyer’s first offer price, they lower their offer. That’s what Davis’s buyers did — lowering the offer on the townhouse by $33,000 after it didn’t appraise.

To avoid such long delays, the new Treasury rules requires banks to establish fair market-value prices on homes at the front end of the short-sale approval process, instead of waiting until after offers start rolling in. They can modify that price if a real estate agent is willing to sign an affidavit stating that the new price reflects its market value.

“I think if lenders can make it work, it could be amazing. But the issue we see time and again is a hold up getting banks’ approvals,” said Guled Kassim, who works on more than 40 closings a month as a settlement officer with Atlantic Title & Escrow in Bethesda.

“Banks have to be convinced that the sales price is market value and that a reduced payoff amount is better than foreclosure,” added Kassim, who bought a distressed property using Flaherty Group last year. “Essentially, you’re asking lenders to take a bath. It’s not a business model most companies have set up. They are very doubtful about pricing, which is why I think the 10-day timeline may be wishful.”

To quicken the pace of its own short sales Bank of America has launched a pilot program for customers and real estate agents to help them through the process.

“If an offer is received, we will be in a position to approve the sale within two weeks,” Bauwens said. “This program is currently in a limited pilot stage, and we hope to expand it soon.”

The bank has also deployed a password-protected Internet portal that agents, sellers and bank employees can use to track short sales in real time, communicate and exchange documents, Bauwens said.

“We hope the new rules revolutionize the short-sale situation,” said Jeff Lischer, managing director of regulatory policy at NAR. “It has the potential — by setting deadlines, identifying property values upfront and providing standardized forms.”

washingtonpost.com

In this area the rate of foreclosure stayed much higher than the rate of the short sales. A year ago there were 6,783 foreclosures versus 2,450 short sales, 6 months ago 3561 foreclosure versus 1545 short sales and 3 months 1704 foreclosures versus 779 short sales.

The most affected properties were single family homes followed by condos by a short distance. 3,628 single family homes and 2595 condos went in foreclosure in the last year and only 1517 single family homes and 670 condos were short sales.

Also the rate of foreclosures and short sales went up from 69% in March of 2009 to 78% in March of 2010.

This area had a great sale record but unfortunately a lot of them were foreclosure properties. By the numbers of foreclosure it looks like a lot of homeowners are still not aware that foreclosure is not their only option and that short sale is great option to be pursued before foreclosure. Also, a lot of investors took a big hit and lost homes to foreclosure due to the inability of keeping up with payments when values started to plunge. The high unemployment rate it has affected people who rent and their ability to make their rent payments.

The employment market has still not seen the improvement that we all hoped for but buyers are taking advantage of the tax credits, low interest rate and low prices. Also, investors who were able to see the downturn of the real estate market and waited for better deals now are coming out and buying real bargains.
Call the Albert Stimer Team at 407-287-6303

From March of 2009 until March of 2010 there were 634 sold properties out of which 51% were either short sales or bank owned. From September 2009 to March 2010 there were 307 sold properties out of which 50% were either short sales or bank owned. From December 2009 to March 2010 there were 131 sold properties out of which 53% were either shorts sales or bank owned. The rate of short sales and bank owned properties stays about the same from a year ago but prices have been going down slightly.

The employment market has still not seen the improvement that we all hoped for but buyers are taking advantage of the tax credits, low interest rate and low prices. Also, investors who were able to see the downturn of the real estate market and waited for better deals now are coming out and buying real bargains.

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