Short Sales are Available all Over The US, with Concentrations

Short sales are real estate transactions where the value of the home, less the costs associated with selling the home, results in less money than it takes to pay off the combined mortgages.  This is a condition called being “under water”.

Most “under water” homeowners either bought their homes recently near the height of the real estate bubble, or refinanced their homes at that time. As a result many of the new home developments in areas like Las Vegas, Phoenix and Florida have a large number of distressed homes that are potential short sales.

Although short sales occur in virtually every area of the country, they are concentrated in those areas hit hardest by plunging values in the real estate market.

There have always been short sales or transaction similar, such as a “deed in lieu”, to accommodate homeowners that cannot meet their mortgage payments or must leave the house for other reasons like a job transfer.  The housing bubble made the problem much worse for a very large number of people and this type of transaction has become much more common.

Finding short sales for the potential homebuyer is possible through websites like http://www.foreclosurelistings.com/list/FL/MIAMI-DADE/SHORT-SALE/. This webpage shows short sales in and around Dade County, Florida. Some MLS listings also indicate when the sale is a potential short sale. Check in your area to see if that is available.

The reason that a mortgage lender would agree to a short sale instead of simply foreclosing on the home is that a foreclosure costs money.  The lender must go through several legal steps that can take many months before they can take the house, and then the sale of the foreclosed property will likely be very near the price of the short sale transaction.  It is a simple matter of cost/benefit for the lender who is looking to minimize their loss.

Short sales can be complex and may require some assistance from a knowledgeable professional. Having a lawyer, a settlement specialist or a realtor on your team can help you avoid missteps that can cause the deal to go bad or to cost you money from an unexpected source because of a simple mistake in a contract or other legal step.

For the potential homebuyer a short sale can be an attractive deal. Be warned, however, that a short sale can take several months to conclude, as the lender must go through several steps to analyze the transaction and get the investors approval.