By now most of us know what a small sale is; when a homeowner owes more on their home than it is worth. For example, a Dallas home seller bought a home in 2006 for $ 285,000 with a finance of $ 270,000. Now that homeowner needs to sell to take a job in Arizona. When the homeowner contacts a local Dallas Realtor to determine the value of his home he learns that comparable homes are only selling for $ 250,000. With the value at $ 250,000 and the finance at $ 270,000, the homeowner is considered “upside-down” on the property. For the owner to be able to sell his home he would have to bring $ 20,000 to the closing desk. But what if he doesn’t have $ 20,000 to bring to the desk? The amount he can sell the home for is $ 20,000 “small” or what he owes to the bank on his finance. Will his home be added to the growing list of Dallas Foreclosures?
If you aren’t in a Dallas small sale situation yourself you probably know a friend, neighbour, family member or co-worker that is. Small sales are the fastest growing segment in the real estate market today and they will be with us for many being to come. A small sale is a viable option for many homeowners that either can’t afford the payments on their home or if they are forced to sell to relocate or for any additional reason. In most cases, a seller will fare better small selling their home than just walking away from it and allowing it to go to foreclosure.
What will all of these small sales do to the values of Dallas real estate? Certainly, they will add to the home inventory levels putting some downward pressure on real estate values but for the most part, they will not have a major negative impact on values. How can this be the case, you say. Many banks that use to accept drive by BOP (broker price opinions) are now ordering a full-fledged appraisal to determine the value of a home previous to agreeing to small sale it. These profession appraisals will help keep Dallas real estate values firm as we work through these challenging times. If you need to sell your home, take your time and to investigate all of the options that are available to you and point out the best one and get started.
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