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Short sales prevalent in Florida

A short sale occurs when a property owner that owes more on the property than its current market value tries to sell it. In Florida, experts say that short sales have become a widespread issue even if fewer of them have been reported in 2014. According to real estate agents in the area, short sales are the result of investors who purchased condos and other residential property as second homes before the market started to crash in 2007.

Short sales can be complicated because they must be approved by a bank before the sale can close. This process can take anywhere from several months to several years to complete, and a property going through a short sale could bring down the values of adjacent properties.

One property in Panama City has been on the market for three years as it goes through the process. According to reports, the air conditioning no longer works and the yard has not been taken care of and two different banks have an interest in the property. While eight people have been interested in the property, none of them have completed the closing process. Although property values in the area range from $180,000 to $800,000, a short sale could possibly be a drag on those numbers. In 2014, 101 properties have been put on the market as a short sale, which is roughly one third of the number reported in 2009.

Real estate transactions can be complex when a bank owns the property. This is because the bank has to make sure that it is getting a fair market price while also recouping as much of their money as possible. Those who are looking to purchase a short sale may wish to consider speaking to a real estate attorney who may be able to guide a buyer through the process from start to finish.

Source: WJHG, "Florida Real Estate Market Ranks Highest in Short Sales", Sanika Dange, June 27, 2014

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