Well the first day of school has come and today marks the end of the first week. Open houses have been held, and homework has begun. What happened to school starting at a slower pace? First week meant getting reacquainted with friends, doing reviews of lessons learned at the end of the previous year and open house did not take place until after Labor Day. Perhaps, in the future those days will come again, just like one day the real estate market will begin to recover from the recent slump. In the meantime, there are some terms we are hearing more of – such as “short sale”.
Short sale means the owner sales the property for less than the amount owed to the mortgage company. This option is available only to those homeowners that are behind in thier payments and are facing foreclosure. Sellers who opt for a “short sale” can walk away from the property without a foreclosure appearing on credit reports but the full amount of the debt written off by thier lender is considered taxable income. While short sales help out overburdened property owners they can also have a negative impact on surrounding property values.
Recently, mortgage brokers and realtors are talking about contracts failing to close due to appraisals and comparables coming in at amount significantly less than the agreed upon sales price. Prospective sellers need to educate themselves on the current market and adjust thier asking price accordingly in order to insure success. Nobody likes to invest time and energy into selling a home just to have the contract fall apart due to a short appraisal.