I get a lot of homebuyer inquiries from my website and one common theme from all of them is their desire to ‘find a great deal.’ Regardless of price range, virtually every potential buyer that I communicate with mentions either ‘foreclosure’, ‘short sale’, or ‘deal’.

I am sure most of you know what a foreclosure is but sometimes I run into people who don’t know what short sale means. Essentially, a short sale occurs when the proceeds of a real estate sale are insufficient to cover the liens or financial obligations owed on the property.

For example, if a home is worth $500,000 and the homeowner has a $600,000 mortgage on the property and the owner cannot make up the difference then a short sale is required. For a sale to take place the mortgage holder would have to agree to take less than what is owed to them due to an economic or financial hardship on the part of the borrower.

This process can take months to accomplish. If you are looking to purchase a property in short sale make sure you have plenty of time and patience. If you need to move into a home quickly it might be best to exclude short sales from your list.

Below are some Sarasota foreclosures and short sale statistics:

Sales since January 1, 2009

Foreclosures & Short Sales                   Non Foreclosures & Short Sales

Number of Sales                       975                                                       1,294

Highest sales price                   $2,900,000                                            $7,125,000

Lowest sales price                    $6,000                                                   $12,000

Average sales price                   $137,193                                               $256,261

Median sales price                    $105,500                                               $170,000

Avg. sales price/list price           93%                                                      89%

As you can see from the statistics 43% of the Sarasota homes for sale since the beginning of the year were either a short sale or foreclosure. Notice how the average home price to list price for foreclosures is 93%. While the average sales price to list price for a non foreclosure or short sale is 89%. I think there is a misconception by the general public that banks will take huge discounts from list price. That is not really true. Banks are not as emotional about a property as the homeowner so they tend to price their properties more aggressively.

I know many Realtors who have been avoiding short sales like the plague. I totally understand the policy. However, you may want to run an analysis in your market to see what percentage of sales are made up of these types of transactions. If they make up a large chuck of business in your market you may want to reconsider that policy.

Visit Marc Rasmussen’s website: www.LuxurySarasotaRealEstate.com

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