The Effect of Short Sales vs. Foreclosure in Ardsley Park

Selling luxury real estate in Savannah, GA is not always easy. Being an associate real estate broker who recently added the Short Sale and Foreclosure Resource certification from the National Association of Realtors® and since new nationwide numbers are saying almost half of all real estate transactions are now in this category, I thought I would try to simply explain the difference and the ramifications to our neighborhood and your home value.

A Short Sale is when a property is sold for less than what is owed on the property while a foreclosure or real estate owned (REO) property is sold by the institution who has taken the property back from the owner for non-payment. Being “underwater” means that a homeowner owes more than the home is currently worth, weather they are in default or not. Traditionally foreclosures were few and appraisers would overlook them as comparables, such is not the case anymore. Foreclosures hurt neighborhoods, they drive down the values of surrounding homes and cause more homeowners to become underwater and the cycle is tough to pull out of.

Ardsley Park has seen a few foreclosures, but overall has held much of its value with home prices back to 2006 levels. What we all need to be aware of is that a short sale which typically sells slightly less than the current value is the best option for homeowners needing to sell whereas a foreclosure has typically sold for 50-60 cents on the dollar. Short Sales are becoming very popular with the lending institutions who really don’t want the physical property and the government has new guidelines for the banks to assist sellers in the process. In short, all neighbors should perceive a short sale as an effort to preserve their home value and as an opportunity for new neighbors to move into a home that might have been slightly more than they could spend on a home. Remember that the person trying to sell in those situations are having a hard time and are trying to do the best they can with their current situation. Look out for them and support them, because the person you help may just be yourself.