According to a recent survey lenders may be less inclined to approve short sales as a result of rising home prices. During the first three months of 2013, 35 percent fewer short sales were completed than for the same period last year. Over the past seven years helping clients with short sales was a significant portion of our business at MagnumOne Realty. Now we are down to just a few for this year.
The rapid decline in short sale activity was a surprise, especially in the Sacramento area where a large number of homeowner still owe more on their homes than they are worth. The countrywide estimate is over 11 million homeowners are still upside down on their homes. Clearly, rising home prices have taken away the incentive for short sales for both the owners and their lenders.
We are seeing lenders acting much more cautiously when reviewing short sales. The lack of volume has provided their staff with addition time to review the request and spend more time on each file. The ‘Approved’ rubber stamp has been retired and lenders are looking closely at markets like Sacramento and requiring current valuations and in almost all our recent short sales, requesting higher contract prices.
Even with lenders being more cautious and wanting higher prices they can be accomplished quickly and they are still an effective financial tool for homeowners who have properties valued at less than their mortgage balance.
If you have any questions about buying or selling a home in the current market, feel free to reach out to me at the MagnumOne Realty Office in Roseville at (916) 899-6571 by email to [email protected] I would be happy to answer your questions.
We specialize serving the needs of buyers and sellers of homes in the Sacramento area including Sacramento, Placer, El Dorado, Sutter and Yuba counties.