In a short sale, homesellers ask their lender to accept a buyer’s offer that is less than the amount needed to pay off the balance of the mortgage.  Lenders who agree to a short sale also typically agree to forgive the remaining debt.  Many call short sales a win-win for lenders and homeowners.  The homeowner avoids foreclosure and banks avoid the cost of carrying the property through the lengthy foreclosure process, not to mention the hassles of selling an empty property in a market saturated with other foreclosures.  On average, lenders lose approximately 19 percent of a mortgage’s value with a short sale but lose an average of 40 percent on mortgages that proceed to foreclosure.  What is the problem with short sales?  Like other foreclosure mitigation efforts, the challenge is in determining which financial entity “owns” the loan and, thus, has the final say on a short sale offer.  Banks also have been slow to ramp up internal processes needed to review and approve short sale packages.  Delays and last-minute dickering often prolong or even derail transaction closing and creates frustration for potential homebuyers and their real estate agents.

Homeowners who borrowed against the value of their second home, or who financed the purchase of their second home and subsequent homes by pledging their primary home or other properties as security, may be liable for taxes on the difference in value should they sell any of their properties for a price less than the value owed on the mortgage.  Under the Mortgage Forgiveness Debt Relief Act, a homeowner doesn’t have to pay taxes on forgiven debt if the collateral behind the mortgage is owner-occupied.  That provision doesn’t apply to a growing number of homeowners renting out their second home or investment property.  Of some 7.5 million vacation homes, only about 10 percent are considered owner-occupied, according to the National Association of REALTORS®.  Many of these homeowners borrowed against the ever-increasing (or so it seemed) value of these properties to finance improvement or to buy other properties. 

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The latest membership profile released by the National Association of REALTORS® shows that overall median REALTOR® income was $42,600 in 2007, down 10.7 percent from $47,700 in 2006, according to the member survey data.  The typical member is 52 years old, female, works 40 hours per week and specializes in residential brokerage.  About 60 percent of respondents have a personal Web site, which they have maintained for a median of four years; 89 percent report their company has a Web site, and 73 percent have a home office.  About 92 percent of REALTORS® report that they use e-mail daily or almost every day, while 88 percent use computers and 82 percent own cell phones. About 34 percent of respondents use “smart” phones with wireless e-mail and Internet features; 27 percent use digital cameras; 19 percent use GPS devices; 18 percent use instant messaging; and 15 percent use handheld portable digital assistant (PDA) devices. REALTORS® are largely politically active, with 95 percent of respondents reporting that they are registered to vote and 91 percent voting in the last national election.

The National Association of REALTORS® launched a new national commercial real estate marketplace in May.  This new platform will help to increase the national exposure for all commercial for-sale and lease listings.  The new commercial real estate marketplace can be found at CommercialSource.com which is operated by ePropertyData and managed by the REALTORS® Commercial Alliance (RCA), NAR’s commercial real estate division.  The goal is to make CommercialSource.com the premier destination on the Internet with the richest inventory of listings along with ancillary features and functions available anywhere on the Internet.  The site will become fully integrated over the next few months to include a national database of commercial real estate listings, a section for online trade show and convention and other information of interest to commercial practitioners.