Bounce Back Buyers Three years ago terms like Short Sale and Loan Modification were new to most people. Foreclosures were just starting to happen; we were all trying to figure out what it all would mean. Since then we’ve seen a lot of large companies and banks go out of business, become familiar with the term "strategic default" and watched as home values and equity disappeared.

Everyone seemed to be feeling their way through this, learning as we go. One of the big questions had to do with the damage a short sale or foreclosure would have on one’s credit report. How long would you be forced out of the market and would banks eventually loosen those penalties due to the sheer number of Americans who were going through this.

Of course, each situation is unique. Is there a mountain of debt, was there a job loss, did the bank levy a deficiency against the home owner. Extenuating circumstances can speed the time it takes before you can qualify for a home again.

Welcome the Bounce Back Buyer

In the coming months we will begin to see some of those buyers who lost properties early on in the recession re-enter the market. Depending on what type of loan you can qualify for, it could be as short as 12 months or as long as 7 years. Here are some recovery times pulled from a post on Calculatedriskblog.com :

Short Sale
VA – immediate, providing you have 12 months of clean credit
FHA – 3 years
Conventional – 4 years

Foreclosure
VA – 2 years, providing you’ve got 12 months clean credit AND the loan that was foreclosed was not a VA
FHA – 3 years, providing that the foreclosed loan was not an FHA mortgage
Conventional – 7 years

What Does It Mean?

I don’t want to imply that these Bounce Back Buyers will cause a recovery, but I do think they are one more step closer to a stronger recovery.

There is no shortage of opinions out there about the state of housing; that run the gambit from double-dips and another 20% drop in values to belief that the bottom is behind us. As I always point out, it’s all local and makes a huge difference where you live. I’ve been and continue to be very bullish on our local market in North Atlanta. We have suffered but are better positioned than most of the country and most of Metro Atlanta.

With fewer home owners going into delinquency, buyers re-entering the market and strong schools to draw buyers – our area will continue it’s climb out of this situation and arrive in a strong position sooner than most areas of Metro Atlanta.