Short Sales held promise as one of the solutions to the nation’s foreclosure mess, but with recent data relaeased by RealtyTrac, a CA based firm that tracks data on distressed homes nationwide, the timeline to complete a short sale has risen dramatically.
The average time from start to finish with a short sales nows stands at an average of 306 days, compared to 113 days in 2006. By comparison foreclosures sales take a average of 186 days to complete, only slightly higher than the 178 days recorded in 2006.
In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner sells the property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender.
Short sales play a big role in the market today. Nationally in the 1st quarter there were approximately 105,000 short sales, and it is estimated that as many as 5 million borrowers are either delinquent or in some stage of the foreclosure process.
Home buyers often express interest in distressed properties, but need to be aware that if time is of the essence in buying a property, a short sale may not be the best alternative.
Wallingford Real Estate – Wallingford, PA 19086
