In short, the list of REALTORS® becoming more familiar with how to handle foreclosure sales and short sales is expected to get longer.

Foreclosure sales and short sales are making up a substantially larger percentage of overall sales in the Spokane market than they did during the healthier housing markets experienced in the early and mid-2000s.
A short sale is when the owner sells their home for less than its value, in an effort to avoid foreclosure.

Karene Garlich-Loman, a real estate sales associate with Coldwell Banker Tomlinson South, says roughly one in eight home sales in the Spokane market currently is either a foreclosure sale or a short sale.

Six or seven years ago, in times of greater home-value appreciation and higher sales volume, one in every 50 home sales involved a foreclosure sale or a short sale, Garlich-Loman estimates.

Though the number of distressed sales is up substantially in the Inland Northwest, REALTORS® are quick to point out the Spokane market is faring better than other markets throughout the Western U.S. – and better than the nation as a whole. In a recent press release, the National Association of REALTORS® said that nearly one in three recent existing home sales was either a foreclosure or a short sale.

Regardless, Garlich-Loman is one of a growing number of REALTORS® in the Spokane market who has recently earned the short sale and foreclosure resource certification from the National Association of REALTORS®. This designation is designed to help REALTORS® work with buyers, sellers and lenders on these special types of sales.

While often lumped together, foreclosure sales and short sales have their differences. The biggest difference involves the question of who possesses the home at the time of the sale.

In a foreclosure sale, the bank already has taken possession of the home and has put it on the market. With a short sale, however, the homeowner still has possession of the property but is trying to sell it for less than is owed, with lender approval.

Garlich-Loman said short sales often involve multiple lenders-homeowners who are upside down on a home and often have a first and second mortgage, for example.

“By the nature of dealing with multiple banks, it makes it more complex,” she said.

The number of home sales in the Spokane market is up through the first four months of 2010, compared with the year-earlier period, a fact that bodes well for the housing market. However, the average sales price has decreased the past two years – depreciation is something the Spokane market hadn’t experienced for many years prior – and home values haven’t yet started to increase again.

In the past, homeowners who found themselves in financial straits could often sell their homes for more than they owed in order to stave off foreclosure, Garlich-Loman said. A depreciating market isn’t as forgiving, she said.

Even so, a number or resources are available online for homeowners who might be struggling financially to keep their homes.

At www.wahomeowners.com, homeowners can find tips for avoiding foreclosures; the nonprofit also offers resources for buying homes. At www.hud.gov, homeowners can sign up for foreclosure-avoidance counseling.