As a Realtor here in Las Vegas, it occurs to me that Short Sales will be a part of our market for a long time to come. Better than 65% of homeowners here in the valley are at a negative equity position in their home and they will be in a situation sometime in the next few years that they will need to sell their home. That means they will either need to write a substantial check upon selling their home or ask the bank to take a short sale.
The banks are getting better at handling short sales, but they are still not actually efficient yet. They will get more efficient and when they do, seller’s are going to have to come to terms with the following question: Do I want to wreck my credit for the next couple of years or pay the bank back what I owe them? The next logical position for the bank is to allow the borrower to sell, but make them pay the shortfall back over time. We are seeing some of this now, but I think it will become much more prevalent in the coming months. When the banks get to this point some seller’s are going to be resentful and wonder how those that have done it before got away without paying the bank back.
One of the questions I ask sellers these days is: Do you think your home will appreciate to a point where you won’t have to do a short sale in the future and/or how long do you think that will take? The answer is very often “Way too long in the future”. If that is the case, why not get the Short Sale over with now and get to a point in the future where your finances recover sooner rather than later. Take your medicine now and be fully recovered in a couple of years or wait and take your medicine later. It’s a tough question. I’m certain the answer is not the same for everyone.
The fact is that if you live here in Southern Nevada , you will most likely be facing these questions in the near future, if you aren’t already.