A lot of people ask me if there are a lot of foreclosures. I saw that yes, unfortunately, there has been a rise in foreclosures over the past 6 months and there are also a lot of short sales.
CNN estimated last month that there are over 1,000,000 foreclosures in the US right now and more on the way.
A short sale is when the homeowners have missed a mortgage payment and they contacted the bank asking to sell the house for an under market price so that the house will not foreclose. It can take months for the bank to agree to an offer.
A foreclosure notice happens around 6 months after not paying the mortgage.
A foreclosure will ruin your credit.
A Short Sale will save your credit, but if the house sells for $100,000 less than what you owe the bank the IRS will tax you for capital gains on that $100,000 so be careful.
Try to not enter either scenerio. Talk to your bank to see if you can qualify for a refinancing or sell before you miss any payments and hopefully break even.
The market is not dead yet. I do see sales happening. The hardest to sell is the $600-800,000 range. The easiest are around $400,000 but the buyer will need a 730+ credit rating and a good downpayment. Also banks are asking for proof of income. IT IS STILL POSSIBLE TO BUY AND SELL A HOUSE SO DO NOT GIVE UP AND DON'T LOOSE HOPE ! The market is still moving...granted not as fast as a few years ago...but it is still moving!