According to a recent account, short sales (those homes listed for sale in which with a lender approval the seller may take less than debt on the property) account for roughly 10 percent of 2009 overall sales nationwide. There are local variations with short sales being a much higher percentage in regions where home values have dropped most severely. In these regions percentage of home inventory requiring a short sale is higher. On a national level, foreclosed homes (bank REOs) are getting bought up by buyers, but short sales are sitting much too long as lenders drag feet on whether or not to approve sales.
According to NAR data, short sales have sold over the past two (2) years at approximately a 13 percent discount to list price while foreclosures have seen a slightly higher 17 percent discount to list or offering price.
The Treasury Department has also recently passed new guidelines to allow them to offer financial incentives to lenders to approve short. These guidelines create an alternate path or course of action for lenders for a short sale or deed-in-lieu of foreclosure for borrowers who truly have a financial hardship. Especially those where loan modification is not a real option. The guidelines provide $1,000 for those that service the short sale process to offset processing costs, and up to $1,000 to investors to release subordinate or secondary liens.
