Short Sale vs Foreclosure: the Prices

by The KCM Crew on July 27, 2012 ·

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

All distressed properties put downward pressure on prices. However, the impact of a short sale is nowhere as drastic as the impact of a foreclosure for two major reasons:

1. A foreclosure, in most cases, leaves a vacant house in the neighborhood. Vacant, unmaintained homes have a negative impact on the value of other houses in the area.
2. When a distressed property sells, it can then be used as a comparable sale in the appraisals of all other sales in the market including the appraisals of non-distressed properties. Since foreclosures sell for approximately 10% less than short sales, they do more damage on the appraisals of other homes.

A short sale impacts the values of other homes to a lesser degree than a foreclosure.

Tomorrow, we will look at the impact of a short sale compared to a foreclosure on children.

If you are seriously thinking of buying or selling, or just plain curious to see what’s happening in your area of interest, start your search at the best real estate website www.DistinctiveHomes-NE.com

Noemi Cardoso
RE/MAX Welcome Home
Serving Westport, Dartmouth, Fall River, MA
Little Compton, Tiverton, RI and surrounding towns.
www.DistinctiveHomes-NE.com

Short Sale vs Foreclosure: The Banks

by The KCM Crew on July 26, 2012 ·

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.

If you are seriously thinking of buying or selling, or just plain curious to see what’s happening in your area of interest, start your search at the best real estate website www.DistinctiveHomes-NE.com

Noemi Cardoso
RE/MAX Welcome Home
Serving Westport, Dartmouth, Fall River, MA
Little Compton, Tiverton, RI and surrounding towns.
www.DistinctiveHomes-NE.com