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Recent data has shown that foreclosures are slowing down and short sales are on the uptick. Many are speculating the fact this means the real estate market has bottomed and is showing signs of improvement. This article has been shared by Phoenix Foreclosure Properties. You can find the Phoenix Foreclosure Properties by searching for foreclosed homes in arizona.

Short sales occur any time a homeowner finds a buyer and brings an offer into the bank. The offer is not quite how much the homeowner owes on the mortgage. If approved, the bank agrees on the purchase price and will write off the remainder of the balance owed. Under the Mortgage Debt Settlement Act of 2007, taxpayers are generally permitted to exclude income from the discharge of debt, provided the property is their principal residence.

Short sales tend to be a more desirable option for both the homeowner in financial trouble as well as the bank. For one thing, short sales are generally completed faster than a foreclosure sale. It usually takes a year from the date of their first missed payment up until the foreclosed home is sold. A short sale can be completed in as few as two months. When a home is foreclosed on, the bank finds an agent to market the home, whereas short sales are left to the homeowner. The homeowner hires a broker and finds a buyer. For homeowners in financial trouble, short sales are also preferable because the credit hit can be about two years, whereas a foreclosure damages credit for seven years.

There is no guarantee, however, that your bank will accept the short sale a lot of homebuyers are put off by the 2 or 3 month waiting period. Short sales could even bring the standard home price down within the neighborhood. The average short sale is roughly 17 percent below market value, however the average foreclosure is 22 percent below market. While foreclosures outpaced short sales in the past, some believe this is changing. Short sales were near a 14 percent market investment in February, however foreclosures were about 20 percent of the market share. Short sales are a preferable choice for banks because they do not remain in inventory and the bank inevitably recovers additional money. While they would lower the cost of homes, over time, foreclosures are often more damaging. Many advise that allowing more short sales to take place will help the housing market for the long-term.

Short sales are a preferable option for banks since they don’t remain in inventory plus the bank inevitably recovers more money. While they might lower the price of homes, through time, foreclosures are often more damaging. Many advise that allowing more short sales to occur should help the housing market for the long-term.

As active hands-on real estate investors company, Phoenix Foreclosure Properties have helped countles of seasoned and novice investors find “the deals” and walk them through every step of the investing process from fix and flips, buy and hold strategy, sweat equity and hard/private money loans, to multifamily portfolios. Tag: phoenix foreclosures