By Linda Stern
WASHINGTON | Wed Jul 25, 2012 11:53am EDT
(Reuters) – Coming soon to a neighborhood near you: A late-summer wave of short sales, as homeowners, mortgage bankers and potential buyers all race to settlement on bargain-priced homes that are worth less than the mortgages written on them.
“We’re seeing a rush already,” said Daren Blomquist of Realtytrac, a firm that monitors real estate foreclosures and distressed sales. “There was a big increase in the first quarter and we’re expecting that to continue.”
A short sale occurs when the lender agrees to let the property be sold for less than the amount owed on the mortgage.
2012 may be the year the short sale market peaks, because of a number of factors. Bankers, pressed by the Obama administration and their own bottom lines, realize they are better off accepting partial payment on a mortgage than taking a home in foreclosure, said Blomquist. Some have created expedited short sales procedures in which they will pre-approve a home for a distress sale and even pay the seller as much as $45,000 to get the deal done.
Commentary from Bob Karp of Karp Properties LLC: My anecdotal observation is that short sales are a driving factor to deals in the Sierra Vista & Hereford, Arizona areas. In fact my office has two such transactions moving forward right now. Both have moved to the contract stage much more quickly than I would have thought – in less than a month from the time our offer was submitted. What does it take to get a deal done? A great agent representing the seller who has short sale experience. (Contact us for a good referral – we don’t represent sellers in short sales.) Buyers prequalified for a loan close to the offered price. A buyer’s agent who is keeps on top of all the details of the transaction. (Contact us – we DO have buyer’s agents that are experienced in short sales.)
Sellers: Pay attention to the tax breaks that may be expiring. Now is the time to try to sell your house if you are contemplating a short sale.