Short sale - come on, everyone's doing it!!

Short sale - come on, everyone's doing it!!
by Kaushik Sirkar, Chandler AZ REALTOR
Chandler Arizona Real Estate

You buy a home.  You need to sell the home.  But for whatever reason....the home decreased in value or you borrowed too much against the home - you owe more than the home is worth.  You would just have to remain in that house until you achieved a better equity position.  But wait, oh, you lost your job also?  Can't make the payments anymore???  Very bad situation.  In the past, you likely would have been forced into foreclosure.

Nobody wants their home foreclosed upon.  Its a horrible process.  It ruins your credit and worst of all, you lose your home.  Guess what - banks don't want to have to foreclose on your home.  They'd much rather you keep paying them interest.  Foreclosures are EXPENSIVE for banks costing on the order of 10's of thousands of dollars.

Ahhh, this leads us to the latest of 'trends'.  The short sale!  Say you are in trouble with your home ala the examples above.  Instead of going through all the costs associated with a foreclosure, the bank may just be willing to forgive a little bit of your debt, likely the delta between how much you owe and what the home is worth.

As the market continues to be 'sluggish' more and more people are finding their homes are worth less than what they owe, the short sale continues to grow in 'popularity.  See this article from the Arizona Republic.  Though  short sales technically aren't tracked as a separate category - they are recorded as regular sales - their numbers are definitely on the rise especially in Arizona.  Agents and consumers need to be aware of this and use it when applicable!

Thanks for Reading :)

Kaushik Sirkar, Chandler AZ REALTOR
Chandler Arizona Real Estate