With So Many Short Sales Today, Should I Wait to Buy?

June 25, 2009

Residential

Sign 'O the Times

Sign 'O the Times

Here?s a question real estate agents are hearing lately??With so many short sales out there?does that mean the market is getting worse and should I be concerned about buying now verses later this year??

The answer, in a word, ?No.? Short sales certainly seem to be on the rise due to a variety of reasons: it can depend on:

  • when someone bought their property (at the height of the market perhaps)
  • the down payment
  • drops in home prices and values
  • did the owners take out a 2nd mortgage
  • and of course just the overall economic crisis (i.e. rising unemployment)

All these factors are contributing to the increasing number of short sales. This creates many challenges for real estate agents and their clients. People want to get a handle on what is happening and how to navigate today?s real estate market.

What is a short sale?

A short sale is simply a transaction in which the lender (or lenders) agree to accept less than the mortgage amount owed by the homeowner. In some instances, the difference is forgiven by the lender, and in others, the homeowner must make arrangements with the lender to settle the remainder of the debt. Ouch!

Are short sales different from a foreclosure?

YES! Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses. A short sale can also be the best option for a homeowners who are ?upside down? on their mortgage because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.

Stay tuned! Next week I?ll discuss the specific challenges faced when dealing with a short sale and how to find the best real estate agent to work with to navigate the short sale process!

We would like to thank TheTruthAboutMortgage for sharing today’s photo via the Creative Commons license.

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About Nancy Gaspadarek

With over nine years in the Chicago real estate market, Nancy continues to enjoy the momentous and exciting process of helping her clients buy and sell homes. Nancy believes that the relationships & friendships that she has developed over the years are priceless. In 2007 she made the decision to partner with Catherine Brennan and the two are collectively known in the industry as The G and B Team. ?It was the best move I could have made?, Nancy says, ?Having a knowledgeable and reliable business partner to counter balance your strengths and have a shared passion to provide top notch service and expertise to all our clients is such a blessing.? Nancy graduated from Florida State University in Tallahassee, where she received a four year scholarship and was the captain of the woman's volleyball team for four years. Nancy has lived in downtown Chicago for over 14-years in a variety of neighborhoods. Her free time is usually spent playing tennis, golf & running/biking along the lakefront. She participated in the 1998 Chicago Marathon and has competed in a number of triathlons as well. She volunteers with The Friends of Blaine School in Lakeview, as well as Umoja Student Development and loves to travel as much as possible. You can contact Nancy at 773.259.9353 or gandbteam.com

View all posts by Nancy Gaspadarek

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