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Short sales decline as home prices rise

In South Carolina and across the country, many homeowners are feeling the pressure of a stubbornly depressed economy. Many homeowners may be suffering from a job loss, or a sudden, unexpected expense. In many cases, this leads homeowners to look for ways out of their mortgage.

Many people feel that the only way for one to lose their home is through foreclosure. However, this is not necessarily true. In recent years, many people have avoided the foreclosure process by pursuing short sales instead.

Short sales are a process by which a distressed homeowner sells their home for less than the value of the mortgage. The bank takes this amount and forgives the rest -- essentially releasing the homeowner from the mortgage entirely.

Short selling has many advantages for both homeowners and the bank. Homeowners are released from the mortgage more quickly than through foreclosure. They also have more control over the selling of the home. Though banks lose money through short selling, the process can be done more quickly than foreclosure. This means the home will spend less time unoccupied, which lowers the chances of the home's value decreasing through vandalism or poor maintenance.

Unfortunately, recent data suggests that short sales are on the decline in America today. Just 5.3 percent of home sales in October were short sales; that's less than half of the number at this time last year.

The reason for the decline is likely tied to the improving housing market, which is pushing prices up all over the country.

Despite the decline, short sales are still an option worth examining for homeowners who are in financial distress. In many situations, it may be the fastest and easiest way to free oneself from a difficult mortgage, and get back to financial security.

Source: AOL Real Estate, "Short Sales Hard to Find, Except in Hard-Hit Housing Markets" By Christine DiGangi, Dec. 02, 2013

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