Why are we talking about Short Sales so much on this San Francisco Real Estate blog?
Short Sales appear to be more advantageous to just about everyone involved vs. Foreclosure. We've got a top 10 reasons on our web site, but here are a couple of main reasons we ALL should care about:
1. Short Sales tend to be better for your neighbors:
* in a Condo building the sooner you can get a HOA dues paying member in, the better for everyone. Yes Short Sales take a long time, but have you read my "Shadow Inventory" article yet? And did you know you can do a Short Sale without making one late payment (a new rule at many banks like BofA). A great idea if you want to protect your credit as much as possible.
* in Foreclosure junior liens are wiped out. I've heard varying opinions on this, but my understanding is the REO lender does not need to make up for the foreclosed owner's missed payments.
* just about anything can be negotiated in a Short Sale, including getting the new buyer or the lender to pay for some or all of the missed HOA payments.
* in Single Family homes you avoid empty homes that could attract crime and vandalism
2. Short Sales protect values FAR better than Foreclosures.
* per the BofA Portfolio Manager, Short Sales net the bank 12% to 20% more on average than Foreclosures. This is due almost entirely to what a Short Sale sells for vs. a Foreclosure. Part of the value difference are the damage often caused by out going home owners or by vandals to vacant homes.
There are many advantages for the Owner/Seller... the above two talk about advantages to the rest of San Francisco home owners. We ought to encourage Short Sales over Foreclosures when ever it makes sense.
More Short Sale info here:
Short Sale FAQ
Short Sale Advantages
Side by Side comparison Short Sale vs. Foreclosure