Short Sale Investing And Shadow Inventory: How Does It Affect The Real Estate Market

Shadow Inventory will have a significant role in Short Sale Investing. If you’re a real estate agent that works with short sales, or a short sale investor, this is important information that you need to know.

There are many experts who are covering this Shadow Inventory, and they can’t seem to agree. Many say that it will wreak havoc on the market, while many others claim that it will have minimal effect at best.

I’m going to discuss what shadow inventory is and how it will benefit short sale investors and real estate agents that deal with short sales. Let’s cover Shadow Inventory.

1. There are millions of homeowners who are currently holding off on selling their property because they want to wait for the market prices to go up. These homeowners would otherwise sell, but because of the suppressed market are waiting. When they do sell, it will all be at once, because market indicators and the news will tell them that everything is great, and the time is “right” to sell. This will crush the housing market with inventory and take prices lower, which is just the opposite of what we want.

2. Lenders are not required to sell homes after they’ve foreclosed on them. They now own the home, and can do as they wish! this is an enormous issue, since there are currently 600,000 homes in the banks REO inventory. This is massive and will add to the homeowners above when everyone decides to sell at once!

3. There is an estimated 7 million homeowners currently in default in the US. this is massive beyond all measure, and will add to the 2 above. They will be trying to sell before losing their home to foreclosure, or simply adding to the banks’ inventory.

If you’re a real estate agent working short sales, or if you’re doing short sale investing, you are part of the solution. Without these solutions, the market will most likely get worse. Worse then we’ve ever seen it. Now is the time to learn about short sales, if you’re involved at all, you can help. It can also be very lucrative.

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