The Short Sale Stigma

Document Type

Article

Publication Date

11-2017

Department

Finance, Real Estate, and Business Law

Abstract

Despite a recent upturn, housing prices remain in flux in most cities nationwide. Lenders are still left dealing with a glut of distressed properties. They can choose to foreclose on the property or allow the owner/mortgagor to attempt to sell the property for less than the outstanding balance of the mortgage in a short sale agreement. The best way to clear the market of distressed properties is an important policy question. This is the first study to examine not only the price and time on market effect of being a short sale but also whether the short sale process itself creates a market stigma.

Publication Title

Journal of Real Estate Finance and Economics

Volume

55

Issue

4

First Page

416

Last Page

434

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