A short sale in real estate is defined as a home or property that the proceeds from the sale are less than the balance owed to creditors and closing costs when sold.

In a short sale the bank or mortgage holder(s) agrees to accept less than the balance due at closing. A short sale is typically caused by some sort of economic or financial hardship on the part of the mortgagor (home owner).

Short Sales are most often executed to prevent a home foreclosure and must be approved by the lender or bank. For the seller a short sale prevents them from having a foreclosure on their credit. The short sale is not as damaging to credit as a foreclosure, but I would advise any seller thinking of a short sale to seek legal counsel first and to seek all options before deciding which option is best for them. But for the home owner that decides to sell their home as a short sale and has tried to work things out with their bank to no avail finding a buyer to write an offer may be their best option. This is usually accomplished by listing the home for sale through a real estate broker or sometimes investors actually contact the home owner in an attempt to purchase the home at a large discount.

For the banks a short sale is typically faster and less expensive than a foreclosure. A short sale can actually be a win/win/win for the home owner, the bank and the purchaser of the distressed property. In this recent analysis of Eugene home sales comparisons, short sales on average are selling for less price per square foot than bank owned REO’s.

Real Estate Short Sales – Is This For Everyone?

The quick answer is, no! Unless there is some sort of hardship for the seller that prevents them from being able to make their payment, banks will not necessarily entertain short sale offers. Part of a short sale package include a hardship letter from the owner. Some very basic questions that a home owner might ask themselves:

• Are you behind on your payments?
• Do you owe more than your home is worth?
• Have you or your spouse lost your job, fell ill, or lost a loved one?
• Has your “ARM” adjusted and you can not keep up on your payments?
• Have you considered just walking away and not owing a dime?

A short sale should be handled by someone experienced in working with them. They are complicated and if not handled properly are more likely to fail and the home ends up being foreclosed and going to auction.

What Steps Should I Take To Pursue A Short Sale?

If you are considering selling or purchasing a short sale, we would be happy to assist you and go over the process in more detail if needed. Short Sales are not for everyone, but knowledge is power so don’t hesitate to contact a local real estate agent today. My recommendation would be:

Dennis Pease / Broker
RE/MAX Integrity
4710 Village Plaza Loop, Suite 200
Eugene, Oregon 97401
(541) 844-9287

Post from: Eugene Oregon Real Estate

Real Estate Short Sales – What Are They?

I have heard numerous people talking about Short Sales and Bank Owned homes, and how the sheer number of them are dramatically changing area prices by devaluing  neighborhood prices based on the low prices they tend to sell at.

So I wanted to see for myself how Short Sales and REO’s are affecting the Eugene real estate market. What I specifically looked at was single family homes only that sold in the past 3 months, not condos or manufactured homes. It’s not that I don’t care for them, but I want to compare apples to apples.

Short Sale Genius Gives Insight On Short Sales -vs- REO’s -vs- Standard Home Sales

Before I get into the local statistics I want to point out that the video featuring Lee Honish and his short sale genius seminar and system helps confirm why the statistics that I find currently are where they are. As you will see below Short Sales are on average selling at lower price per square foot than Bank Owned Homes or standard sales.

Are Short Sales Right For You?

As a buyer if you need to move in a certain time frame or if you find that home that you get emotionally attached to, Short Sales are not the best avenue for you because they may close, but most likely not on your time frame. They can be difficult and emotionally draining. They are great for the investor that will not be heart broken if the home doesn’t close.

The statistics I used are pulled directly from RMLS, which is the Multiple Listing Service that all area REALTORS® use.

This first graph is all single family homes that sold in the past 3 months that are not Bank Owned REO’s or Short Sales.

For Those Of You That Like To See Actual Statistics, Here They Are.

NOTE: Click on the charts to view them full size.

Eugene Single Family Home Sales Statistics for Prior 3 Months

As you can see above, of the 202 home sales the average price per square foot sales price is $152.00

Eugene Short Sales Sold in the Prior 3 Months

Now as expected the average price per square foot sales price at $134.00 is about $18 per square foot less than a normal sale. What we see here is that if you want to go through the hassle of a Short Sale buyers have been saving about 12% off the sale price. Although that doesn’t take into consideration that many Short Sales don’t show as well or are in equal condition as an average home sale where the owner is trying to make the home show well. After all, in a Short Sale or Bank Owned home the seller is not making any money so they usually don’t go out of their way to make the home show well or even keep it in good maintained order.

Eugene Bank Owned, REO Sales for 3 Prior Months

These statistics are interesting on several levels. There have been more than twice as many Bank Owned home sales as Short Sales in the last 3 months in Eugene. This is not very surprising to me since once the Bank owns the home they want to dispose of them quickly. Where on the other hand when a home is in a Short Sale the banks are not nearly as responsive, although this seems to be changing somewhat.

Another intriguing statistic is that Bank Owned REO’s are selling for approximately 5% less than the average sale, yes only 5%. So many people believe they can purchase Bank Owned, foreclosed homes at drastic price reductions and in some areas of the country you may get even better prices.

When looking at these statistics you may wonder why Short Sales are only averaging 12% below market value and REO’s are roughly 5% below market… In my opinion it’s not so much that the Banks are not dealing, but more likely that buyers are only purchasing homes that are priced to sell. That would explain the small percentage of difference between the average sale price and home sales involving banks whether REO or Short Sale.

So sellers take note and price your home at a price that will actually bring an offer, rather than pricing it high and hoping for an offer. These graphs offer verifiable proof of what most agents advise their clients daily, but are seldom listened to. Of the 202 non-bank related home sales the average sales price was just 4% less than asking price.

Home buyers today are very savvy to the market and will seldom write an offer on an overpriced home.

Post from: Eugene Oregon Real Estate

Eugene Oregon Homes Sales – REO’s, Bank Owned, Short Sales