In areas hit hard by the housing bubble, short sale signs are common. But if you live in one of those areas and you're selling a home that is not in distress, it may be to your advantage to specifically state in your listing that it's not a short sale, according to a recent study that looked at 5,000 home sales in Boca Raton, Fla.

"Our findings speak to that particular local market, but I think you can extrapolate to other areas where we've seen a lot of distressed properties and foreclosures in the last few years," says the study's co-author, Ken H. Johnson, an associate professor at the Tibor and Sheila Hollo School of Real Estate at Florida International University in Miami. ''What we found is that, in those affected areas, there is a short sale stigma."

The idea of a short sale stigma, says Johnson, is a little counterintuitive. After all, buyers should be on the hunt for deals, so theoretically, a short sale sign should help drive demand. But in areas with an abundance of distressed properties, Johnson's numbers show that the opposite is true.

Properties listed as ''not short sales" sold for 2 percent to 5 percent more than nondistressed properties without the designation, Johnson's data show. The ''not short sale" properties also spent less time on the market, selling about 10 percent to 15 percent faster than similarly situated properties.


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But what's driving the stigma? Johnson says he believes the problem stems from the fact that the glut of short sales and foreclosures has created a logjam over the past few years, making it more difficult for buyers to purchase a short sale than it would have been in a more normal market.

"In some areas, buyers are probably starting to believe that short sales mean a big hassle because they've heard horror stories about waiting months for one or more banks to sign off on the deal," Johnson says.

That makes sense, according to Chantay Bridges, a senior real estate specialist with Clear Choice Realty & Associates in Los Angeles, a city that was hit hard by the housing bubble.

"Short sales have myriad variables, unknowns and maybes, leaving the buyer clueless at any given stage whether they are even still in the running," says Bridges, who agrees that buyers in areas with high foreclosure rates do stigmatize short sale properties.

In any given short sale, a buyer may be waiting for the seller to resolve a bankruptcy or sort out lender delays. The seller might even be trying to postpone a notice of default.

Bridges says she thinks nondistressed sellers in those areas should make it clear to the market that they aren't doing a short sale, given the current stigma.

"Buyers want to know that they can possess their dream home as soon as possible," she says. ''Many times when people hear the word 'short sale' it has become synonymous with 'long wait time.'"

Not all markets are the same. In the Phoenix area, buyers looking below the $250,000 price point may not be able to avoid short sales because the total housing inventory is about half of what it would be in a normal market, says Nicole Hamming, an associate broker with United Brokers Group, in Chandler, Ariz.

On the other hand, buyers looking at houses above that $250,000 threshold ''will often choose not to look at short sales as they have more options and less competition," Hamming says.

Not all short sales are the same these days, Hamming says.

"Who the servicer (lender) is, and who the underlying investor is will dictate the flow and the timeline to bring it from contract to close," says Hamming.

She adds that the scenarios can range from ''easy" to ''painfully difficult," adding another caution to the short sale designation.

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Mortgage rates spiked again this week after the June employment report released last week showed better-than-expected job growth in the U.S.

The 30-year fixed-rate mortgage rose 18 basis points to 4.66 percent. A basis point is one-hundredth of 1 percentage point.

The 15-year fixed-rate mortgage rose 13 basis points to 3.75 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, rose 16 basis points to 4.82 percent.

The 5/1 adjustable-rate mortgage rose 15 basis points to 3.63 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.

(Reach Michael Estrin at editors@bankrate.com. Distributed by Scripps Howard News Service, www.shns.com.)

AP-WF-07-11-13 2009GMT