Since the start of 2010, distressed home sales have risen by 58%. There are multiple reasons for this. One reason is that the economy has not improved since the start of the year. Many people are still without employment, still without a paycheck. Many of the unemployed are homeowners who did not expect to lose their jobs. Without work, these homeowners have fallen behind on their mortgages and the banks are foreclosing on their home.
Another reason is that banks have become more aggressive about foreclosing on homeowners who've defaulted on their mortgages. For example, Wells Fargo announced that they'll no longer allow extensions for people late on their mortgage payments. Homeowners underwater on their mortgages and behind on their payments now realize that they cannot delay any longer. They are choosing to short sell their homes.
If you're underwater on your mortgage and facing a tough financial situation, the first thing you should understand is that you are not alone. Over the past two years, thousands of people have either had their homes foreclosed on or have beaten foreclosure with a short sale. From Aliso Viejo to La Habra, Orange county homeowners have seen the market value of their homes plummet while taxes are raised and jobs are lost. In the month of July, the major banks foreclosed more homes than any other time on record. So, perhaps, to say "you're not alone" is an understatement.
How does the fact that "you're not alone" help you? Simply put, people have blazed the trail you can travel to sell your home and escape your bad mortgage situation.
A short sale is more common, more accepted now than any time in the recent past. Short sales provide homeowners with an opportunity to sell their house and possibly have their mortgage debt forgiven. Short sales typically sell for less than standard, equity sales. This is not a problem for the seller if their short sale negotiator is able to reach an agreement with the bank whereby the bank forgives the homeowner's mortgage debt in exchange for the sum received from the "short sale" of the home. As a result, short sales are a good idea for sellers and a bargain for most buyers!
If you think a short sale might be right for you, here's what you need to do to get started:
First, find a reputable real estate agent with a track record of success in short sales. Short sales are not the same as standard (equity) sales and they require a knowledgeable person to see them through to the end. Don't rely on tag lines like "short sale expert." Paper certificates from a brief seminar aren't good enough. Ask to see proven results.
Second, make sure you have an attorney reviewing the terms of the sale. A good short sale attorney may be able to eliminate "recourse" language from the sale thereby stopping banks from trying to collect on your mortgage debt in the future.
Third, don't hide anything about the home. When you find an agent, tell them the full story so that nothing surprises either the agent or the bank. When negotiating a short sale, surprises put the success of the sale at risk.
Finally, be ready to wait. Unlike standard sales, short sales require negotiation and negotiations take time.
We recommend you work with Fitzpatrick and Prince Real Estate and Rasmussen Law Firm. They have a proven record of success having closed 95% of their short sales. Nationally, the average short sale closure rate is only 20%. Additionally, these companies have worked together on a number of short sales, they understand how the other operates, and can move quickly, together, to negotiate with the banks to close your short sale. Start the conversation today with Mark, Whitney, or Blake at Fitzpatrick and Prince Real Estate.
Give them a call at: 800.880.9962.
