Posted: 25 Jul 2012 04:00 AM PDT
This week, we are looking at the advantages of a short sale over a foreclosure from five different perspectives: Sellers', Neighborhoods', Banks', Prices and the Children. – The KCM Crew
The banks are beginning to favor offering a short sale to distressed homeowners rather than foreclosing for several reasons:
§ The short sale sells on average for $27,000 more than a foreclosed property.
§ The bank does not have to take on the expenses and maintenance of a vacant home in a short sale.
§ The banks realize a vacant house impacts the values of other homes in the area thus devaluing assets that they may also hold a mortgage on.
§ Some courts have questioned whether the foreclosure process was correctly followed on some homes. This could place a cloud on the title of such homes. In a short sale, there are no title challenges as the original seller signs away title at the closing.
It is for the above reasons that bankers are beginning to favor short sales over foreclosures.
Tomorrow, we will look at the impact of a short sale compared to a foreclosure on prices.