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The short sale debate

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The short sale debate

A number of homes are being sold in Manteca as short sales.

Bulletin file photo/


POSTED September 17, 2010 3:01 a.m.
Are short sales good for Realtors and bad for homeowners?

That question was actually derived from a statement that was posted on a social networking site last week.

The homeowner was responding to a video link of my business partner explaining the difference between the purchase process of a foreclosure compared to a short sale.  Some statements that were made included, ”Short sales are just as bad as foreclosures for properties...” and “(Short sales) further decrease values for homeowners who are making their payments...”  Then the lightning rod: “(Short sales are) good for agents bad for homeowners!”

As you can tell, distressed property in our area is a very hot topic and lightning rod for debate.  These comments started a wave of interaction lasting for days.  Knowing that this homeowner is not alone in his or her feelings about short sales, I wanted to take a few moments to help explain and shed light on an issue that is touching us all and is not going away any time soon.

“Short sales are just as bad as  foreclosures for properties...”
I would disagree with this statement for many reasons.  The biggest reason why a short sale is so much better for the property being sold is the home owner gets to stay throughout the process.  When the homeowner is still living at the property, they are still caring for it.  They are still out walking their dogs in the neighborhood, watering the lawn, newspapers aren’t everywhere.  The homeowner is still maintaining and caring for the property in most cases.

Contrast that to a foreclosed property and even my 4-year-old daughter can spot those. Dead lawns, high weeds, papers taped to windows, dilapidated fencing and structure, unknown people walking around it are all signs of a foreclosed property in our neighborhood.  I can sympathize with this homeowners suggestion, but in reality it is always better to have the homeowner living in the home and caring for it rather than sitting vacant for months on end.

“(Short sales) further decrease values for homeowners who are making their payments...”
This statement is a common misconception.  My team and I use the same strategy to market a home and sell it at the highest price we can just like if it was a regular sale.  The values of homes are strongly affected by supply and demand just like any other product.  Christmas is coming soon (which freaks me out to think it is already around the corner) and we all know that there will be this hot new toy that our kids will want and they only made a small number of them.  That demand makes the price go up.  With housing the same is true.  If you have five houses for sale on your street that are all the same, price may be the only thing that can set you apart.

Lets’ consider the first statement when we think of how a short sale effects the value of current homeowners, if the distressed homeowner is still living in the home, odds are they are keeping up the curb appeal of the home.  If you have ever walked a foreclosed property in the last couple of years or weeks, you saw what is really affected negatively home values in your neighborhood.  Foreclosed properties are the ugly duckling of the street.

“(Short sale are) Good for agents bad for homeowners!”
The homeowner was expressing his or her frustration and pointing the finger at Realtors and our commissions.  The big problem with that is Realtors help consumers and banks buy and sell both short sales and foreclosed properties.

The homeowners main point in the post and following dialogue of conversation was that some short sales turn into foreclosures anyway, the agent still gets his commission and the neighborhood still looses equity.

Do some short sales end up as foreclosures anyway? Yes, but our team at ShortSaleWithJeff.com has been very successful at preventing foreclosure and helping a very large part of our community.

My business partner Jeff Green said it best in the dialogue “In spite of these facts I am grateful to serve the community. This recession has brought out the best and worse in people...mostly the best. I have learned to respect my clients for making tough decisions and can only say “God bless them” as they go through one of the greatest ordeals in their life, losing their home. As agents we offer the aid of short selling and helping the client avoid foreclosure. While not pleasant, in most cases it is better than the alternative.”

At the end of the day that is what makes a short sale so much better for our neighborhoods and community as a whole, it’s people helping people make it through difficult times together.

For more information on avoiding foreclosure with a short sale, please feel free to email me at jreyes@pmz.com 209-923-8527 or visit my site http://ShortSaleWithJeff.com
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