Short Sales: What’s The Hardship?

What are the hardships behind so many Short Sales? We’ve heard a few reasons on the news lately about why so many people can no longer afford their mortgage payments.  We’ve heard mainly “Not qualified to buy the home in the first place” ” Rate re-set to higher payment” “Scammed into getting mortgage”.  Well, in my area on the Emerald Coast of Florida, that’s not what I am finding from my Short Sale sellers. I did a quick study of 61 active or recently sold Short Sales from Destin and Santa Rosa Beach to Navarre, Crestview and Fort Walton Beach FL.  Here are the summarized hardships:

Loss of Income:          51

Job Transfer:               4

Medical:                       3

Divorce:                       2

Fraud:                         1

Most of my sellers lost their jobs.  Or they lost significant income due to the economy.  I have sellers who were in construction, building residential homes, laying tile.  They have little work. I have salespeople, from real estate to cars, who can no longer make it.  Some of the sellers had a combination of income loss and medical bills.  Several of them have been forced to move out of the area to find work.  A few are military, with no choice but to relocate when the Air Force orders them.  Should some of these sellers not have been able to quality for a mortgage? Were they over-leveraged?  Perhaps, especially with so many investment properties in my area.  But, overall,  loss of income is the crux of the problem.

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