Thursday, November 20, 2008
Losing Your Home to Foreclosure?? There May Be Other Options!
The Sky is Falling!Yesterday, I received a call from a Seller who has been trying to sell his home with another real estate firm for the past 250 days. His listing contract with the other firm had expired and he received a post card from my office announcing that we sold a home on his street. He purchased his home in mid 2006. In late 2007 his employer laid him off. He has since found work in his profession, however he is now earning less money. He is struggling to pay the mortgage for his home that was once affordable. He did what many other sellers in similar situations do. He listed the home for sale with a real estate agent at a price that, if realized, would be sufficient to pay off the mortgage and the expenses associated with the sale. Demand is Not Dictated By a Seller’s NeedsThe Seller was upset at his previous real estate agent for not delivering a sale. While I agree that the agent may have been able to better advise his client, I explained to the Seller that I have never met a seller’s agent that possessed the ability to overcome demand limitations. If better purchase options exist in your area, buyers will likely pass on your home to move in a different direction. Buyers are simply looking for their best option. 250 days later, still no buyer.Could His Agent Have Done More? While his previous Agent may have been well intentioned, he did not identify a very strong option for this Seller, a Short Sale. A Short Sale occurs when a homeowner owes more on their property than the property is presently worth, however their mortgage company agrees to accept less than what is owed as payment in full, in an effort to avoid the foreclosure process. Avoiding a forclosure will greatly minimize the damage to a seller's credit.Why Don’t We See More Successful Short Sales?Many real estate agents do not understand short sales and therefore are either reluctant to get involved or deterred by the high number of failed short sale attempts. Agents may have difficulty “qualifying their seller” for the short sale process. Not all sellers will qualify. In addition, mortgage companies are often overwhelmed by the growing number of distressed property sales and may be slow to communicate internal requirements. Time is of the essence and there is little room for a learning curve that has evolved.The Silver LiningThere are real estate agents that have started to specialize in this growing niche market. There is additional training that may improve their success. As with hiring any real estate professional, you want to ensure that the agent is qualified to handle this niche. Ask for references and additional qualifications that might set the agent apart form other real estate licensees. Please visit this link for additional useful information on Short Sales. http://www.realtor.org/library/library/fg335