I took a Real Estate Continuing Education class last week that was put on by the owner of a company that does short sales negotiations. He had lots of interesting statistics and stories about short sales, both the horror stories and the good ones. The thing that I took away more than anything else is that this issue will be with us for many years to come. I guess that was pretty obvious because of how far home values have fallen (at least in this area). Locally we are at about 1995 home value levels, which is about 40% lower than the 2006 peak values. So almost everyone who bought in the late 1990's and early 2000's is pretty much guaranteed to be under water. The presenter at this training opined that short sales will be with us (and probably will represent the majority of our business) until at least 2020. I have no reason to doubt that prediction.
I'm not a big fan of short sales. Let's face it, they are a pain in the rear; however, they are also a fact of life in real estate and so much better than a foreclosure. So, after checking them out further, I decided to partner up with this short sale negotiations outfit and re-institute my short sale Web site as a way to generate some business. I own some interesting URL's oriented around short sales and they tend to generate leads. I had turned off ny short sale web sites because the last set of short sale negotiator partners that I had turned out to be sleazy operators, even though they were attorneys (maybe that shouldn't have come as such a surprise).
I'm also theorizing that an improving economy will increase short sales, since there has to be lots of pent-up demand to sell in the Baby Boomer segment that is at, or near, retirement. They need to downsize for retirement and their loss of job income may qualify as their hardship. Certainly many have put themselves in untenable mortgage positions, with most believing when they did so that property values would continue to rise. There also has to be a huge group that needs to move somewhere to take advantage of work opportunities that should start opening up in an improving economy. They'll need to sell here in order to move for jobs.
It's possible that the programs that are being experimented with by some of the big banks to reset loans amounts as part of a loan restructuring will catch on. So far those are aimed at letting the people with toxic ARMs refinance and I'm sure the banks are not real big fans of them either. The banks used to offer a deed-in-lieu option too; but, that has largely fallen out of favor.
So, if you are in Michigan, go to mishortsales.com and check out our short sales program. Doing a short sale certainly beats letting the place go into foreclosure or being really stupid and just walking away.