Digital News Report – Before a struggling homeowner goes into foreclosure on their property many will work out a short sale with their lender to help sell the property. The lenders are opting to go with a short sale because of the depressed housing market and the glut of foreclosed properties in these areas. The hope is to sell the property before it sits vacant and cost the bank money to maintain, repair, and pay property taxes on it. According to a report issued by CoreLogic, short sales on homes have tripled since 2008 and the lenders are losing unnecessarily $41,500 on average per short sale transaction. California, Florida, Texas, and Arizona have 55.8 percent of the share of short sales listings.
The report continued to explain that the banks are losing an estimated $310 million on the short sale deals. One reason is that around 4 percent of the properties that are sold as a short sale are getting flipped and resold for a profit within 18 months.
CoreLogic also said that the short sale had some problems with fraud, but the investors still pose an important help for lenders to unload properties and free up their liquidity. The report estimated that there are around 400,000 short sale listings annually.
A benefit to buying pre foreclosure properties is that the homes are less likely to have been sitting empty and has less of a chance to need as many repairs or has become vandalized. The longer a property sits empty the higher chance for vandals. Real estate agents may have pre foreclosure lists of homes in the area that are trying to be sold at a reasonable discount. Buying a pre foreclosure property is another option besides just looking for a foreclosed home if you are looking for a bargain price.
By: Victoria Brown