Inside Mortgage Finance publication and Campbell Surveys just released the results of a nationwide survey of 1,500 real estate professionals regarding the level of short sale and REO or bank owned property transactions in our country. The numbers are a bit shocking to say the least.
According to the poll, short sales jumped to 15.9 percent of home purchase transactions last month.
“Short-sales activity took a temporary dip in November around the expected expiration of the first-time homebuyer tax credit,” said Thomas Popik, the survey’s research director, in a press release.
“Few first-time homebuyers wanted to take the chance that their short-sale transaction wouldn’t be approved by the Nov. 30 deadline. But now that the tax credit has been extended, we see first-time homebuyers once again snapping up attractively priced short sales.”
Because mortgage lenders often take several months to approve a short sale, such transactions are most attractive to first-time homebuyers who don’t need to also sell a current home in a given time period, the release said.
The release also outlined possible reasons why short sales might be more palatable than REO transactions.
“Short sales typically result in lower lender losses and houses left in more saleable condition. Moreover, borrowers that agree to a short sale can often buy another house with mortgage financing after only two years. For borrowers going though the foreclosure process, mortgage financing can be unavailable for a period of five to seven years.”
Short sales typically sell for only 91 percent of listing price, while move-in ready REOs sell for 99 percent of listing price, on average, the release said.
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Benson Sotheby’s International Realty
Crested Butte Colorado
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