Perhaps the greatest advantage of a short sale to beleaguered homeowner facing default and foreclosure is the opportunity to move on with life and put the bad debt behind them as quickly as possible.
Typically, short sales take longer than normal homes or foreclosures to sell because of the time required for the parties-lender, buyer, seller-to respond. “In the past waiting 6-18 months was common…now I find the process taking about 3-4 months if you are aggressively on top of everything,” reports a Realtor specializing in short sales.
Improved short sale management systems and lenders more willing to settle for a short sale than foreclose helped the transition have speeded up the process. By comparison, as processing times and backlogged inventories continued to plague foreclosure markets last year, especially in the nation’s 23 judicial states, 2012 was proclaimed the “year of the short sale” and short sale inventories zoomed.
However, now there are so many short sales on the market that they are selling slower than foreclosures that have made through processing and “normal” sales. Demand is considerably less for short sales among investors, especially the institutional investors who are having a major impact on some markets, and as a result they are selling at a discount about equal or even greater than foreclosures.
Last year short sales of homes that had never entered the foreclosure process accounted for 22 percent of all US homes sales, more than all REOs and sales of pre-foreclosure properties combined, according to RealtyTrac.