Short sales rising — and that’s better than foreclosures

Studies have shown (look, just trust me on this — studies really have shown) that while a foreclosure sale can knock down property values in a neighborhood, short sales don’t have that kind of effect.

Ergo, short sales are better than foreclosures.

So it’s good news that RealtyTrac is reporting that short sales are up. Per USA Today:

Short sales — which occur when a lender agrees to a home sale for less than what’s owed — were up 33% in January year-over-year, and preliminary February numbers also look strong, according to market researcher RealtyTrac.

Although the most important tidbit might be this sentence:

RealtyTrac says foreclosure sales, which occur after a bank has repossessed a property, still outnumber short sales nationwide but the gap is closing. (Emphasis mine.)

A likely culprit for the change is the new FHFA rule that requires banks to respond to short-sale requests more quickly. Homeowners have obviously preferred them to foreclosure, but lenders too often dragged their feet or ignored the request.

Of course, the best result will be when short sales and foreclosures both drop to negligible levels. Till then, though, we’ll take a bit of good news.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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One Response to Short sales rising — and that’s better than foreclosures

  1. When trying to decide whether a short sale is right for you don’t be fooled into making the decision under false hopes that your credit will not be impacted all that much. The biggest advantage in a short sale is the shortened time frame in which you will be able to purchase a home in the future.

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