Short sales are more beneficial than foreclosures for lenders

By Liz Clinger Updated on 7/20/2012

Darin Blomquist, the vice president of RealtyTrac made a statement on Thursday that the distressed homes market is showing  a lean towards short sales over foreclosure, making it easier for distressed homeowners while reselling the homes faster and with a higher profit than foreclosing on a property.

According to Blomquist, a short sale averages about $175,000 while a foreclosure resale can take months to sell and is sitting around an average sale price of $147,000. Bloomquist noted that the favorability of short sales over foreclosure by the banks could be a preference to take a loss right away rather than risk holding the property for months and hoping it sells at the price they need, and also helping the borrower avoid the foreclosure.

Bloomquist foresees foreclosure activity to rise during the last half of 2012, but notes that the releasing of foreclosures are in being done in a “cautious, with a managed flow” and does not believe the market will be flushed with an abundance of foreclosure listings.

Bloomquist also noted that while there are many borrowers holding on to their homes while underwater to wait for a rise in equity or value, there are lenders that see this as the right time to start listing distressed properties for sale while some markets are seeing a shortage of inventory.

Those considering buying a home may want to be on the lookout for more homes on the market in the next few months. Get prepared now and find a lender on Lender411.com.