(PRWEB) January 07, 2013
Illinois real estate short sale and REO volume trending up along with traditional sales volume indicating Illinois real estate undergoing a slow recovery. REO homes are up 18.8% in 2012 from the prior 2011 year. Short Sales volume of sales is up 33.2% in 2012 from 2011. Despite the fact that distressed home sales are going up, traditional sales have incised 29.8% from the prior year as well. This trend is showing that Illinois real estate inventory has a good absorption rate and will lead to a slow but study market recovery. It is unfortunate that the volume of short sales still remained low compared to bank owned inventory (REO), 14,105 short sale units sold verse 30,358 REO units sold in 2012 according to the data provided by MRED MLS.
A “short sale” in real estate is a sale in which the owner/seller of a property sells the property for an amount less than the balance owed on the property. The resulting amount not satisfied by the proceeds of the sale is known as a deficiency. The fact that the amount paid leaves a deficiency does not relieve the seller/owner from paying the unpaid amount remaining on the original loan.
In residential lending, the amount financed is usually represented by two documents: the promissory note and the financing instrument, usually known as a mortgage or deed of trust depending upon the laws of the state where the security property is located. Thus, in a short sale, the amount paid often does not satisfy the amount owed under the original financing agreement.
While payment under a short sale may be sufficient to enable the lender to release the financing instrument to clear the title to the land, thus enabling it to be transferred to another buyer, the original balance of the note may remain unpaid and the original buyer may remain liable for the deficiency. At the time a short sale is transacted, the original lender or holder of the note may then decide whether pursuing the remaining deficiency balance is worth the cost and effort of doing so.
Short sale is a great alternative to foreclosure. In Illinois homeowner can not perform short sale on their own, they need to request services of a licensed real estate agent and a licensed real estate attorney. Call John Herman Team to receive a reference to an experienced short sale real estate agent in your area.