A good question about real estate short sales is: Will they become easier to do in 2010?

Real estate short sales are one of the most complicated and difficult types of transactions to undertake thus driving many High Desert real estate agents and homeowners to avoid them.  While a short sale is not for every homeowner that is upside down on their real estate loan, it is a viable alternative for some.

Real estate short sales, where a lender agrees to take less than the amount due on the loan, tend to sell for less than owner occupied homes but for more than foreclosures. Short sales tend to be in better condition than foreclosures making them more attractive but the length of time involved in completing a short sale transaction can be a major deterrent to all parties involved.

It has not been uncommon, during 2009, for a real estate short sale in The High Desert area to take 120 to 180 days to be completed.  This lengthy process drives many buyers and agents away from the short sale transaction.

The federal government has been putting more and more pressure on lenders to consider and complete short sales rather than foreclose and as lenders slowly gear up to handle short sales the processing time should began to shorten in 2010.

A few tips you may want to know about if you are considering a short sale:

1. Banks agree on a sales price that determines their bottom line at the beginning and generally will not allow any further credits to the buyer once the offer is accepted making it a good idea to make sure all defects are disclosed up front.  A buyer that comes back, after acceptance, asking for repairs to items discovered during a property inspection will most likely kill the deal. Having you’re home in the best possible condition will also help fetch the highest possible price making the lender more amiable to accepting a higher payoff.  Home Inspections

2. Another consideration that can be a time consuming process is to attempt to work out a loan modification that reduces your loan amount so when you attempt to do a short sale the lender does not take as big of a hit on the bottom line.

3. We highly recommend that you consult with a real estate attorney and CPA to review any documents that the lender requires before closing the transaction.  You could owe tax on the amount of money the lender forgave, though the Internal Revenue Service does offer tax relief for those who lose their homes through foreclosure or short sales between 2007 and 2012.

It takes a lot of patience and hard work to get through a short sale transaction. However, a short sale might harm your credit for two to three years where a foreclosure will be on your record for 5 to 7 years.

More information on Real Estate Short Sales

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