Lenders are increasingly turning to short sales for foreclosed properties, providing relief for both the distressed homeowner and the U.S. residential real estate market, MSNBC reported.
Short sales, where lenders agree to allow the owner to sell the home for less than its worth, rose by 26,000 this year even as foreclosures fell by 255,000, according to Hope Now, a resource for homeowners facing foreclosure.
Short sales benefit homeowners as they shorten the relief process, and allow them to begin rebuilding credit scores sooner. The speed of short sales help bring new residents into distressed homes, rather than letting them sit vacant and become vandalized and crime-infested.
Meanwhile, banks earn more from short sales, and avoid the costly foreclosure process. The average price of a foreclosed home in the second quarter of this year was $164,217, compared to $192,129 for short sales, according to RealtyTrac data.