Some properties are being advertised as a short sale when they really aren’t in an attempt to lure bargain-hunter buyers. A new book,Foreclosures, Short Sales, REOs, and Auctions: Tools for Success in Today’s Real Estate Market, published by Dearborn, provides guidelines for using the term correctly. Here’s an exclusive excerpt:
There are a number of licensees who are attempting to attract buyers by using the term short sale in marketing property. It is very similar to the furniture stores that are constantly advertising that they are going out of business to draw purchasers. The fact that a home has lost value or that the loan has increased in amount and is now more than the value of the property does not automatically make the transaction a short sale.
It’s important that a licensee conduct a thorough analysis, not only of the property value and loans but of the prospective seller’s financial condition as well. As was indicated, according to some licensees who are experts in the field, only a small percentage of short sales are approved by lenders.
What is to be gained by these licensees who advertise properties as short sales when they really aren’t? The answer is attracting more buyers, of course.
Some licensees are describing properties as preforeclosure listing or short sale and use the terms synonymously. Appropriately, a preforeclosure sale of property would involve one where the owner is in default. The property may or may not be worth less than the loan amount. Continue reading »
The National Association of Real Estate Editors announced three winners, along with a first-time author award, for top real estate books this year for the 2008 Robert Bruss Real Estate Book Awards. Check out the list of winners and then share with us the best real estate book you’ve read this year.
The following is excerpted from Financial Shock: A 360-degree Look at the Subprime Mortgage Implosion and How to Avoid the Next Financial Crisis (Pearson Education, 2009) by Mark Zandi, chief economist and cofounder of Moody’s Economy.com. Here are four policy changes Zandi recommends to prevent the next financial crisis. Read all 10 in his book.
Policy Step #1: Adopt a voluntary mortgage write-down plan
Many troubled mortgages could be salvaged if lenders would agree to modify them, typically by reducing the principal owed. The borrower would get to stay in the house, the lender would avoid a costly foreclosure, and the economy might avoid falling into a destructive self-reinforcing cycle in which house price declines beget foreclosures which beget still more price declines. Thus it seems both reasonable and urgent to encourage this wherever possible.