A report has been released stating that last year, over 25% of homes in Palm Beach County, Florida were purchased in a short sale or from banks. This is truly a sobering example of where the economy and housing market is today as this number used to be less than 1%. This trend is not just true in Palm Beach County, but across the rest of the state and the country. About 22% of property sales in Florida are homes in foreclosure or short sale and 23% of property purchases in the U.S. are distressed sales.
Another interesting aspect of this new trend is the move away from foreclosure towards short sales. The difference between foreclosure and short sale is simple. A foreclosure is a seizure of a home that is owned by the bank, and short sale is when a lender agrees to take less money than is owed on the property. In 2011, short sales were up by a modest 3%, but bank-owned sales were down by 32%. The reason for this may be the significant benefit that short sales have to banks in comparison to foreclosure. If a bank takes ownership for a home, as in a foreclosure situation, they are responsible for maintenance and lose more money than in a short sale.
This recent trend may also be the result of the banks' push to convince homeowners to choose a short sale. They offer a clean slate and quick escape to individuals and families who have no way of repaying their mortgage and getting out of debt. In one recent example, a bank called a homeowner in West Palm Beach and offered to give them $10,000 for the deed to their house. This negated the necessity of enlisting the help of a realtor and eliminated the risk of not being able to sell the property. The CEO of RealtyTrac estimates that in 2012, the trend will increase. In the "Year of the Short Sale," we may see foreclosure sales increase and short sales increase in particular. Those involved in the property market believe that lenders will more aggressively try to get rid of the distressed assets in their possession.
If you have further questions about bankruptcy, foreclosure, or short sale, contact a
Florida bankruptcy attorney from our legal team. Leavengood & Nash, P.A. has years of experience in bankruptcy law and is dedicated to ensuring that our clients' rights are protected no matter what their unique situation. Sometimes there are more alternatives available to you than banks and creditors would like you to believe. To get a full and accurate picture of your financial situation,
contact a Florida short sale lawyer from our team today!