Short sales are making up a greater percentage of all home sales in the country and especially in Colorado.
Recently released data from RealtyTrac show that short sales – when lenders allow homeowners to sell their property for less than they owe on it – accounted for 17 percent of all sales in Colorado during the second quarter of this year. That’s up dramatically from 10 percent in the second quarter of 2010.
Nationally, short-sale homes sold for an average of $192,129, which was about 21 percent below the average sales price of a traditional sale, according to RealtyTrac.
“The jump in pre-foreclosure sales volume coupled with bigger discounts on pre-foreclosures and a shorter average time to sell pre-foreclosures all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales,” said James Saccacio chief executive officer of RealtyTrac.
While short sales are an increasingly popular and efficient answer to selling distressed properties, homeowners need to be aware, said Paul Murphy, Colorado Springs real estate attorney.
Unless the bank puts in writing that it officially forgives a homeowner’s debt, the bank has six years to pursue a judgment on the loan deficiency in Colorado and the homeowner may still be liable for the financial loss.