Slowly, But Surely – Foreclosures Move to the Background as Short Sales Become Common

Ever so slowly, foreclosures are moving in the background after being in the forefront of the real estate woes that millions of people have been suffering during the past few years. The stories of families being evicted out of their life-long homes have been far too many and very gut wrenching. But as the option of short sales become more and more prevalent, both banks and homeowners are keen on the idea of going through the process of a shot sale rather than a foreclosure.

Why are Short Sales a Better Option?

 As a solution for homeowners to be able to avoid foreclosure, short sales make sense because they allow banks to skip a large amount of processing, fees, legal time and effort and more – only to end up in the same boat; a property that is selling for less than what is owed on it. Choosing a short sale also makes sense for credit-conscious consumers, which is just about everyone – because this option does not affect credit ratings as much as a foreclosure does. Not only that, those people who have suffered through a foreclosure have a very long wait before they are able to easily buy another home.

How to Tell If You Qualify For a Short Sale

Many people do not realize that, just like any other loan, the short sales process involves an application for which you must qualify and subsequently be approved. There are several factors involved in determining eligibility and not everyone qualifies. But if you are able to secure a short sale rather than a foreclosure, one of the main benefits is a softer impact on your financial and credit portfolio. The usual reasons for applying and getting approved are typical derailment situations such as job loss or inability to work, divorce or inadequate equity.

Resources Available for Further Assistance

With so many homes in distress these days, there is a greater demand for information and resources to learn about ways to overcome this difficult market and the harrowing situation of having to deal with possibly losing one’s home. Aside from consulting with your real estate agent for guidance and perspective on your situation, there are counselors and representatives of HUD available at various HUD hotline numbers. They offer free advice, help you to understand your options and have a wealth of information available. Homeowners can also work with their banks to assess the pros and cons of a short sale versus a foreclosure.

Statistics Show the Current State of the Real Estate Market

•  In the nation, there are 10 million homes currently in distress 
• About 3.8 million homes are currently sold in a year 
• Approximately 1 million homes that will sell in 2011 are under stress 
• Two million homes are being held off the market by banks – 4-6 years of distress inventory will be hitting the market 
• Over 14% of homeowners are struggling to pay their mortgage 

No matter what situation you find yourself in, if the possibility of a losing your home is appearing more and more likely, it is essential that you research and determine all there is to know about short sales as it may be the right option for you. With the slowly changing trends shifting away from foreclosures and toward short sales, there seems to be some relief in distant sight from the real estate woes being suffered by many property owners these days.