We are all well aware of foreclosures and how they can adversely affect home values.
As much as we may not like it, the reality with today’s market is many homeowners are upside down on their mortgage and facing foreclosure. And what’s worse is, after exhausting every avenue available, they may still lose their homes to the bank!
With that said, however, a foreclosure is not the only option available for those homeowners in need of mortgage relief or help. In fact, more homeowners are becoming aware of the benefits of doing a short sale.
A short sale may just be the best solution for the troubled homeowner. And, the real kicker is it can also be the best solution for the neighborhood.
Some homeowners just walk away. Sometimes, in the middle of the night, they just up and leave. Upon leaving a home vacant, it begins to deteriorate. Meanwhile, it may be months before the bank forecloses. During this time, no one is taking care of the property. The pool turns green, and the house just sits and falls into disrepair.
Even after the house has gone into foreclosure, it can take months before the bank releases the property to be sold. During this time, the house remains vacant, and some are even vandalized. Just having vacant and foreclosed homes in your neighborhood can bring your property value down.
When the bank finally does put these homes on the market, they are sold under market value just to move them quickly and get them off their books.
A short sale, on the other hand, is a negotiation between the bank and the homeowner. The homeowner wants to do a short sale instead of a foreclosure, and works with all parties involved to get it done. Because short sales are handled much like a normal home sale, with the exception of the added negotiation, the homeowner will usually continue living in the home while the short sale is finalized. So, the home in question doesn’t become vacant, and the home is maintained as it normally would be.
Most of the time, you don’t even know the house is a short sale. There is a regular for sale sign in the yard. In addition, the home is still lived in and kept in good condition, while the neighborhood looks the way it always did.
Once the sale goes through, the homeowner moves out, and the new owner moves in, just like a regular sale. But the best part of a short sale for the neighborhood is how it helps to keep the home values up compared to a foreclosure. Currently, the average price per square foot for the Phoenix metropolitan area for a short sale is $77.60, but it’s only $59 for foreclosures. That is a 24 percent difference, which is huge when you consider the fact these homes are used by appraisers when they run comps to get a home value in the neighborhood.
For more information about short sales and foreclosures, visit www.ArizonaShortSaleToday.com. You also can contact me today for a confidential consultation. Call my cell phone at (602) 571-6799, or send an e-mail to Lorraine@ArizonaShortSaleToday.com.