Realtors Cut Number of Foreclosed Homes through Short Sales
Troubled homeowners in Duluth, Minnesota are being helped by realtors to save their houses from becoming foreclosed homes through short sales.
Gary Kalligher, co-owner of the Duluth unit of Re/Max, and 3 of his agents have been certified as distressed property experts after completing and passing a course in the use of short sale to prevent foreclosure.
Short sale can be used by homeowners who no longer have the income to keep up with monthly payments to prevent their properties from becoming foreclosed homes. If they avoid foreclosure, they are able to keep their credit records from being downgraded by foreclosure.
The role of the real estate broker who is experienced and trained in distressed properties is to find buyers who are willing to buy distressed homes at lower prices and negotiate with banks who are willing to accept purchase prices lower than the mortgage balances. More and more banks are willing to work out short sales because they want to avoid the cost of the foreclosure process and the costs of holding and maintaining foreclosed homes.
Steve Braman, one of the agents who have just earned a certification in short sales, said that mortgage delinquencies are erased from credit records within 2 years while data on foreclosed homes can stay in the records forever.
According to the Minnesota Home Ownership Center, the number of homeowners in Saint Louis County who sought foreclosure prevention counseling increased in 2008 to 586 from 242 the year before.
The center said that almost 5,000 homes were prevented from being added to Minnesota foreclosure properties in April because of the center’s counseling work. Around 26,000 houses became foreclosed homes in 2008, according to the center.
Short sale statistics in Duluth is difficult to determine, according to the Duluth Area Association of Realtors, because disclosure of short sale data is voluntary.
Re/Max agencies in Minnesota and in other parts of the country want to train their agents in the use of short sale as a foreclosure prevention option because foreclosures are costly both for the homeowner and the lender. Re/Max said the foreclosure process can take 9 to 12 months to complete and can cost much more than short selling.
On the other hand, the short sale process can be completed in a few months and will cost less than the foreclosure process. The realtors also said that they feel a deep sense of joy if they are able to help ‘ prevent their houses from becoming foreclosed homes.
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