Situated on the St. Johns river at the top of Florida's Atlantic coast, Jacksonville is the largest metropolitan area in the country from a geographical standpoint. It's cheap, too – 677 short sale homes were sold in the area in 2011's fourth quarter, at an average sale price of $116,447. Jacksonville saw a 41.34 percent increase in short sales from 2010, with pre-foreclosures making up 12.4 percent of all home sales in the area.
For banks and other lenders, a short sale is not only faster, it avoids the increasingly messy foreclosure process. "There's been all of this controversy about proper paperwork and documentation in foreclosing lately," says Blumquist. "By doing a short sale, the banks are avoiding that controversy."
As a result, some banks are actively encouraging the practice. In Florida, for instance, Bank of America has begun offering select homeowners up to $20,000 in incentives for agreeing to a short sale, rather than letting their home go to foreclosure. "The average price of these short sales is consistently higher than foreclosures because of the state of the property, and you can argue that the lenders can recoup more of the losses," Blumquist adds.
