Hackney's Houses

Like the brand "Xerox" became a term meaning "copying," the real estate term Short Sale is being lumped in with Foreclosure.

It my experience so far and speaking only to our area up here in Whatcom County that there are far greater Short Sales happening than actual Foreclosures.

What is a Short Sale?

Essentially it means that your home is worth less than you owe. 

How does this happen?

Several factors, but two or a combination of two things happened.  One, our house values fluctuate just like the stock market.  A person may have purchased at the height of the buying frenzy and now their value has gone down.  Many tend to place blame on the lenders, appraisers, and even real estate agents for creating this.  What people forget is how we as a society view our homes as an ATM.  This is the 2nd factor many people face a short sale situation.

Types of Short Sales

Essentially there are two of these.  Any of us could be in a short sale situation, should you need to sell.  If you don't need to sell, values will eventually go up if the history of, well...the world continues as it has.  Some short sales are Distressed meaning they can no longer continue making payments and are on the verge of the Foreclosure process.  Another group of Short Sales isn't so much that they can't make the payments as they just have to move due to a relocation, etc. 

The Process

Short sales, like a Foreclosure, involve working with a bank.  Banks typically aren't in the business of owning homes.  There is some potential for opportunity in a short sale situation, but you need to be patient.  Just hearing back from the bank can take many weeks.

It is my belief that we will continue to see more and more short sale situations in the coming year or so as the market stabilizes and prices recover.  Where we are at in the Puget Sound is much less volatile than other areas of the U.S.  We tend to be at the tail end of the ripple effect and as a result don't see quite the price drops and other negativity seen in other parts of the U.S.