Never before have we experienced these market conditions!  Bank owned homes have dominated the market for the last few years, now something called a short sale has emerged.  We have all heard of them, they are in our neighborhood, family and friends have turned to either buying or selling them.  But what does it mean?  A short sale simply means the bank is willing to accept less then what the homeowner owes.   In short, they are upside down in their mortgage.  It is only when the homeowner finds themselves out of a job or other hardship that he or she is forced to sell at a loss.  Is this process easy?  No, it is a grueling uphill battle for both the seller and their agent.  The seller has to detail their hardship in a letter, also they have to show their financial records as well as their bills and any income.  Mounds of papers go back and forth from the seller to the bank.  Long waits on the phone and notoriously lost papers, the banks have made it very difficult to the point that the house ends up in foreclosure. 

How many are sold per month?  Here, in Macomb County, the average per month is 45 short sale homes out of about 700 closings.  With such bad odds, buyers walk away from them after they have sat on an offer for months waiting on the bank’s approval to process the short sale.  Does this make sense?  NO!

Banks don’t get it!  Take a house that a family is maintaining as they live in it and sell it short sale.  Or, take a house that the owners were forced out and now has no heat and electricity, flooded basement, mold issues and is destroyed by vandals.  Which of the two scenarios have more value?  Right, the short sales.  Bank owned or foreclosed homes have dominated the market, capturing as high as 60% of total sales per month.  It is the bank owned homes that are affecting our home’s value.

Let me finish by asking you, WHO GOT THE BAILOUTS?  What are your thoughts?  Are you thinking about buying or selling a home under a short sale program?