Based off of data from MRED (Chicago MLS), short sales end up netting the banks more money. But why is it so difficult for banks to understand this? Below is a chart that breaks out types of sales (Traditional – Has equity, REO or Bank Owned, and Short Sales). The most telling data is when you compare the median sale price of a short sale since 2008 to the median sale price of an REO or Bank Owned property.
In 2008-09, short sales sold for about 64.8% more than a bank owned property!
In 2009-10, short sales sold for about 63.9% more than a bank owned property!
In 2010-11, short sales sold for about 50.3% more than bank owned property!
While there are many variables that can effect condition of property once it is foreclosed, this difference in median sale price is staggering! Clearly the banks need to rethink their approach to short sales and the foreclosure process, especially here in Chicago. Many of these homeowners could have stayed in their properties and would have continued to maintain them, pay taxes and contribute to the community. The end result is that many of these properties are sitting vacant, dragging down values in many neighborhoods because the banks wanted to lose more money?!? If you have a hardship and are having trouble making payments, don’t hesitate to go the short sale route. Why?
1) As you can see, if you are going to miss payments, it’s actually more ethical to your bank to do a short sale because you most likely are going to net them more money.
2) It helps out a neighborhood or community that you may want to continue to live in. Your home is short sale to a new family that is going to live in the home and take care of it. Even if it’s an investor, they are much more likely to take better care of the property than the bank.
3) We’ve been starting to hear of lenders that are willing to lend again to short sellers as soon as 2 years after the fact. Albeit there are exceptions and you may not get the bottom of the barrel rate, you can still be in a position to purchase while prices are very favorable. The fact is, values aren’t going through the roof anytime soon and it 2 years you’ll likely be able to buy a home at half off 2006 prices or more in certain areas.
If you or someone you know is in a position to short sell, please call me for a free and private consultation at 312-953-6725. Or visit my Chicago short sale website at www.ShortSaleSuperMan.com I will be able to tell you in you are candidate for short selling, what the consequences are and how the whole process works. I have closed over 50 short sales now and I have the experience needed to get you out from under your debt. I can also refer you to qualified legal and accounting professionals on my team that can help you better understand any future legal and tax consequences. Call 312-953-6725 today!
Median Sales Price
Rolling 12 Months
Attached & Detached Single-Family Properties
All data from MRED. Powered by 10K Research and Marketing.