Services

Sellers

In a declining market with rising interest rates, every day that passes makes it harder to maintain profit in a home. The former hot marketing strategies are less and less effective as the market corrects and only end up costing you as the seller money. There are 2 things that increase your chances of selling in this economy, price and presentation. That is it. The properties priced right and in presentable condition still sell, the rest sit, and sitting in this economy means losing money. The days of automatic appreciation are behind us. Properties are losing value and taking longer to sell. Those not priced correctly out the gate will not sell and the more price cuts applied will stigmatize the property and require deep price reductions to get the home to move. In this market, do not delay, time is equity lost. I charge a 1.9% listing commission and strongly recommend that sellers offer 2.7% or more to the buyers agent.

Buyers

There is no question that we are in a buyers' market. The longer you wait to purchase, the more deals will be available. There are numerous short sales on the market, nervous sellers, stale listings, and motivation from every corner on the selling side; something buyers haven't seen in over a decade. These conditions call for a real estate professional that has lived through both boom and bust markets in housing. There is no fear of missing out in this market - the fear is entering too soon and losing value in the home. I help buyers navigate these conditions to find the right home at the best possible price.

Short Sales

A short sale happens when a lender is willing to take less than is owed on the mortgage when a home sells. Why would they do that? For the last 15 years they would not. They didn't have to because home values were on their way to the moon. However, that is no longer the case and it is commonplace for lenders to find themselves in a situation where their borrower owes more than the home is worth. If the borrower continues to pay there are no problems, but if the borrower can no longer pay then the lender has 2 choices, a short sale or a foreclosure. Banks and mortgage companies do not make good house flippers and neither wants to own the home. An experienced professional can guide a seller through the short sale process and prevent a foreclosure from entering a seller's credit history.

Effects on Credit

Short Sales stay on record for 7 years and eligibility for a new mortgage is restored after 2 to 3 years. There is a hit to the credit score but it is not typically reported as a foreclosure, rather as a "settled account."

Foreclosures stay on record for 7 years and are viewed as a more serious credit risk with some lenders refusing to originate a new mortgage for up to 7 years. The hit to the credit score is more drastic and the account is reported as a foreclosure.

Reasons to pursue a short sale include a reduced impact on credit and a faster restoration time to be eligible to borrow again. Sometimes a lender can issue a 1099 to the borrower for the forgiven portion of the debt which can lead to a tax penalty.

Reasons to allow foreclosure include a temporary period of relief from a housing payment. The process is long sometimes lasting 12 to 18 months during which no rent or mortgage is being paid. This however has its drawbacks, the lender will surely trash the credit report and could file for eviction which would go on record as well.