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Did the short sale I closed just screw up the market?

Worried about the low market? Consider a short sale as your graceful exit. Call Andy at 216-324-6637

Times are tough right now.  Distressed properties are selling out the wazoo.  Prices in many areas, especially the high luxury, the inner city and newer developments have all fallen.

A big issue in all market segments is the issue of getting a nice house that has been sold to appraise high enough so that the buyer can get a loan and close on it.  There are several reasons for this.  Number one mortgage companies have more stringent appraisal guidelines.  Comparable properties used in an appraisal report must be closer to the subject property and have sold more recently than they used to.

Also many of the newer developments were hit especially hard as on the top of the market the new homes sold for way more than they were really worth.  In those areas only the repos, short sales and lucky homeowners who had large cash or equity reserves can sell.  This means fewer comps that are higher and many that are lower making it hard to justify to a lender what a property might rightfully be worth.

The large amount of sellers combined with fewer buyers has caused fewer sales and high percentage of sales are in some way distressed.

In Northeast OH, OH I pulled up all the sales in the last 60 days.  Of the 62 single family homes sold:

  • 8 were corporate owned, RELO’s or REOS. or RELOs
  • 7 appeared to be short sales in Northeast OH, OH
  • 3 were clearly estates

That is 18 apparently distressed sales out of 62 sales in 2 months which is about 29 percent of the sales during this period.  At this point in time there are currently 178 properties listed in Northeast OH, OH and only one property has sold a day for the last two months so there is a lot of competition out there.  In general the value priced properties are selling quickly and the others are not.

This brings me to the question in the title of this post.  I am an agent that specializes in distressed short sales.  Are short sales that I am selling helping to screw up this market we are in?  It would be easy to see so many lower priced short sales and think exactly that.  However short sales are an effect in the market.  The cause of short sales is the issues with the economy:  both in people losing their job and not being able to pay and the lowered market prices causing negative equity.

Short sales actually can hugely help neighborhoods when you compare them to a similar bank owned home.  Short sales are typically lived in and taken care of.  Bank owned homes are often let go while vacant, getting run down and eventually selling at an even more discounted price.  Because of the slow turn around time for short sales they do typically sell a little bit lower than their non distressed counter parts however they sell for significantly higher amounts than an equivalent bank owned properties.

If you are going to need to sell on a short sale though it is important that you work with an agent that both knows short sales is willing to adequately market your home.  There are some so called short sale experts in our market area who take pleasure in their low short sales prices.  They don’t even put pictures up on their short sale listings.  We view our goal in a short sale to make it is a win win for the seller as well as the sellers lender.  Approaching it from an attitude of good faith gives us a better shot of negotiating excellent terms for our short sale sellers.

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Andy Morris is an Ohio real estate broker with an expertise in selling homes on a short sale. If your Ohio home is heading towards foreclosure or you owe more than your property is worth, please call Andy at 888-4-STOP-IT to see if you qualify for a short sale with your lender.  Are you not in my area?  His foreclosure answer service is free to you as well!

Worried about the low market? Consider a short sale as your graceful exit. Call Andy at 216-324-6637

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