Important Facts You Must Know About Short Sale Investing And Shadow Inventory
If you are a Real Estate Agent that does short sales or an investor that does short sale investing, the Shadow Inventory will have a significant role in your business that you must know about
There are many experts who are covering this Shadow Inventory, and they can’t seem to agree. Many say that it will wreak havoc on the market, while many others claim that it will have minimal effect at best.
This article will uncover secrets about the shadow inventory that many people don’t want you to know about. After researching this topic in depth, I believe you should understand the concerns.
1. Millions of homeowners that are currently “safe” with their payments, and in no trouble with their loan simply want to move for location sake, upsize, downsize etc. Many of these homeowners are waiting to put their properties on the market, because they feel like the market will “turn around” and they can get a much better price. The end result will be when these millions of homeowners decide to sell at the same time, creating an oversupply of homes on the market, thereby driving prices down.
2. Let’s talk about the six hundred thousand homes that lenders are holding in their REO inventory. Most people don’t know that when a lender forecloses on a home, they don’t have to sell it right away. They can hold it until they decide to sell. What are they doing? Well, they too are “waiting” for the market to go up so they can add their huge inventory to the market.
3. Here’s the icing on the cake. There are 7 million homes now in default. these homes will go to foreclosure, and be added to the lenders’ huge numbers, or they owners will try to sell them before the foreclosure, adding to the total number.
How do we fix this? Short sale investors and real estate agents doing short sales will be key to solving this problem. If they can perform enough short sales, and prevent a large portion of these properties from going to foreclosure, they will collectively be able to help prevent a housing market catastrophe.
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