I wanted to post this up, as I’ve been dealing with several people and been contacted by other agents regarding short sales and foreclosures
Many homeowners are facing the prospect of foreclosure due to many circumstances.
A Foreclosure the action a bank pursues (Normally) when a buyer can no longer make payments for the property they have a mortgage on.
Homeowners may stop making payments for a myriad of reasons, lost jobs, health issues, increase in interest rate or maybe just because they don’t want to any more.
Foreclosure times may vary by state, it can be as little as 30 days , or as much as year or more (It’s quite high in my area).
If you are facing foreclosure there’s a order that you should go in to find your options. I suggest this for EVERYONE I work with to determine the best course of action.
#1 Determine why you can no longer afford the home. Is it because of a lost job or a change in personal circumstance? Or do you need to move somewhere else and don’t want to make payments on it. If you can’t make payments on it due to insufficient funds, you need to either try and increase your income to meet the demands of the mortgage payment, or find a way to remove the mortgage or reduce it.
2# Valuate the home facing foreclosure. I run in to FAR too many homes that end up in foreclosure that could of been easily prevented. In some cases , the homeowner could of MADE money by selling it and moving. In one instance the homeowner could of made $35,000 if they would of known the proper value of their property. The best way to do things is to have a real estate agent (Or a few) give you a good market value of your property. Doing this is free and usually doesn’t obligate you to using that real estate agent, should they be needed.
If you’re barely making payments (or not at all) on the home, CALL YOUR LENDER and see if they can reduce the interest rate, hold it back or anything of the sort. Banks don’t WANT to foreclose , contrary to popular belief, it’s extremely expensive for them to do so, and they almost always loose money on foreclosure. In some instances, you can refinance the property with a lower interest rate, or re-amortize the loan to reduce the payments. Both are potential options should you find you just don’t have enough cash.
If you can no longer make payments, and can not sell the home and break even or make money. Contact a real estate agent that can perform a short sale for you. If you don’t know of one that’s in the business of doing a short sale, you can contact me and I will set you up with an agent that knows how to do one. Unlike a normal sale, your lender will pay the real estate commission for the sale of the property. In many cases , the bank will sign off on any due amount to them, and the property can be sold for less than the amount owed. Some banks will even give the homeowner moving expenses to cover things. This is great for when a property has negative equity due to market corrections.
As always, consult a professional in the appropriate field if you’re facing foreclosure. Most of these things can be done for free, and in some instances , they can make you a little bit of money in the process, or cover moving expenses.
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