Short Sales Start Selling in Northern VA

• February 25th 2009

by Will Smith

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Realtor Frank Llosa, owner of Frankly Realty, is proclaiming good news for homebuyers in northern Virginia: short sales are now closing. This time last year only about one in twenty of these sales were closing, which led Frank to call the listings “fake” and he discouraged homebuyers from pursuing them.

Short sales occur when a seller owes more on her mortgage than the home is worth. The seller puts the property on the market at a discounted price to prevent being foreclosed upon — which would adversely affect her credit and be bad for her lender, the bank. If the bank thinks the short sale price is too low, it will reject the offer and the sale won’t close. The approval process (or disapproval process, as the case may be) can take months.

But the patience and paperwork can be well worth it. According to Llosa, foreclosed properties are typically listed at 7-12 percent below market, while a short sale can be 12-20 percent below market.

Last year short sales developed a bad reputation for being a waste of time and resources. In the last few months, however, they have made a comeback. Says Llosa:

“In my post over a year ago only 3 short sales had closed in all of Arlington in a year out of many dozens of failures. In the last 4 months 3-4 have closed in my building alone (Clarendon 1021)!

Be sure to see his full post for all the details plus tricks on how to pursue short sales.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/short_sales_start_selling_in_northern_va/581.