Banks View Short Sales as Better Option



America’s banks are more willing than ever to embrace a short sale in order to avoid the costly process of foreclosure, according to latest statistics from RealtyTrac.

Banks see short sales as the way ahead © SVLuma - Fotolia.com

Over the last three months of 2011, there was a 15% increase in the number of short sales, totaling some 88,000 – almost 10% of all home sales for the fourth quarter, according to a report in CNN Money.

This rise is in stark contrast to the number of bank-owned sales, which decreased by 12% year-on-year. The 116,000 recorded foreclosures amounted to just 13% of all home sales for the fourth quarter. According to RealtyTrac, the average short sale during the last quarter went for $184,221, compared to just $149,686 with foreclosures.

This would appear to be concrete evidence that there is a growing willingness on the part of banks to embrace short sales, and this trend is expected to “show up more in 2012 as lenders recognize short sales as a better option for many of their non-performing loans,” according to RealtyTrac’s Brandon Moore.

CNN Money also reported that over the last quarter, almost one in four (24%) of all homes sold were in some stage of foreclosure, either bank-owned or at some other stage of the process. This figure is down on the previous year’s fourth quarter total, when 26% of all sales were accounted for by foreclosures.

Even so, Moore revealed that he expected the number of foreclosures to rise in 2012, especially pre-foreclosure sales, as lenders look to dispose of distressed assets more aggressively in an effort to clear the backlog built up over the last 18 months.

About Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.