More Florida short sales properties in 2012 than bank owned

In Florida about 22 percent of sales in 2011 were of homes in foreclosure or short sales.

What is interesting it is not the number of distressed sales, but a shift  in Florida at the end of 2011 toward more short sales and fewer sales of bank-owned homes.

A short sale is when a lender agrees to take less for a home than what is owed on the mortgage, while a bank-owned sale is of a foreclosed home that has been reclaimed by the lender.

In Florida, short sales were up 3 percent in the fourth quarter of 2011 compared with the same time in 2010, while bank-owned sales were down 32 percent.

The banks know they lose less money through a short sale then a foreclosure. In a short sale they don’t have to spend money to get the ownership of the home, they are not responsible for the maintenance of the home and there is no positive profit involved in having a home foreclosed. For banks, it’s all about cutting losses.

Banks are now dangling incentives in front of homeowners to make a clean getaway, rather than drag out a long foreclosure.

It looks like 2012 will be the year of the short sales and maybe the next year as well.

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