Distressed sales statistics for Metro Denver including stats for short sales and foreclosures. Advantages and disadvantages between loan modifications, short sales and foreclosures
According to the National Association of Realtors, "Distressed homes were at 32 percent of sales in June, compared with 31 percent in May; it was also 31 percent in June 2009" (www.realtor.org). Loan modifications and short sales have increased because many homeowners are struggling to make their mortgage payments, have no equity in their homes, or are facing foreclosure. Denvers distressed sales are not as high as the national averages but they still have an impact on the Denver market. The chart below shows the number of distressed sales over the last year in the Metro Denver area.
When facing foreclosure, it is important to know that you have some options. Lets talk about some of these options and their advantages and disadvantages.
Loan Modifications - The government has designed many programs to help Americans avoid foreclosure. These programs have helped some, but can be difficult to negotiate, timely to obtain, and not everyone qualifies.
Short Sales - A short sale is a Real Estate sale in which the proceeds of the sale do not cover the balance of the current home loan. The lender may agree to accept less than what is owed on the property. This allows the seller to sell the property and avoid foreclosure. The sellers credit will still be damaged, but it will be minimized in comparison to a foreclosure. After a short sale, one will have to wait about 2 years before purchasing another home.
Foreclosures - When a seller is unable to pay their mortgage and the bank becomes the owner through the foreclosure process, the sellers credit is highly damaged - more so than with short sales and loan modifications. After a foreclosure, it can take 2-5 years before one can purchase another home.
Source: Denver Metrolist. Based on Information from Metrolist, Inc. for the period 7-1-2009 through 7-31-2010. NOTE: This representation is based in whole or in part on data supplied by Metrolist, Inc. Metrolist, Inc does not guarantee nor is in any way responsible for its accuracy. Data maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
