Marc Von Musser, MBA, CFS, CSP

My phone rings daily with the same question, "Marc, I can't afford my house and I have no equity, what do I do?"

Well, there are several options available to you. The main thing is to take action! 60% of North San Diego Homeowners, and all homeowners for that matter, will do nothing. This leads directly to a foreclosure!!! A proactive plan of action can often times help keep a homeowner in his home!!

It's important to note, that 80% of homeowners want to KEEP their home, so you must make some changes and take intelligent action IMMEDIATELY!

When I meet with a client in this situation, here are a FEW of the things we cover:

1) Do you want to keep the home? Can you afford the home? Are you willing to make changes?

2) Let's look at your expenses and look for places to save money! We can normally find $1,000 - $3,000 a month that people are wasting. Simple changes here and there allow the seller to increase their cash flow, make their payments and keep their home.

3) Look for creative ways to increase a part time income. I know numerous people that make $1000-$10,000 a month on auction sites like eBay! Start a home based business and make the tax code work for you, and create a second income.

4) Look to do a loan modification. Work with the lender to have them freeze or reduce your interest rate. Banks will often do this IF you present it in the right way!

5) Short Sale: If you cannot work out a loan modification or make the payments; a short sale is often the best solution. This is a far better scenario than a foreclosure.

Short Sales require a specialist and should not be handled by an untrained agent! The average agent has approximately a 10% chance to get the short sale approved and closed. Trained short sale agents often have success rates over 90%!

I recently read that only 1 agent in 250 have had at least 10 hours of training in short sales! The days of calling your neighborhood friend/Realtor are over if you want to successfully negotiate a short sale. A few designations to look for are the CSP: certified Short Sale Professional, CFS: Certified Foreclosure Specialist, HREU Short Sale Professional or a graduate from Short Sale Genius!

The main thing is you must TAKE ACTION if you know you are falling behind on your payments! Call a professional!

So, when do we hit the bottom? Where are we in the North San Diego Real Estate market? I hear these question daily, and while no one really knows, we can look at key indicators to identify and get an idea of what the future might bring to the North San Diego Real Estate Market.

To understand the future, we must briefly look at a big reason the San Diego Real Estate and the North San Diego Real Estate Market are in this condition. The tough market is largely due to the Adjustable Rate mortgages that were so popular in 2002-2006. These loans would offer a very low introductory interest rate, with a rate adjustment in 2-5 years. While the are numerous other factors, the number of resets (loans adjusting to a higher rate) will increase.

The sales pitch by lenders was simple, "don't worry about the rate increase, we'll refinance this way before then." Unfortunately, this didn't happen. North San Diego Real Estate Prices dropped rapidly, lenders increased the requirements to obtain a loan, debt to income ratios become more stringent, loan programs disappeared and lenders stopped offering 'Stated' loan programs (not proving income). The compounding effect of these variables eliminated the main ways homeowners got out of this challenge in the past!

So what happens to these tens of thousands of North San Diego homeowners? Well, they do have some options. Unfortunately, most of them are not great.

A few options:
1. refinance (if possible)
2. create a second income (get a part time job)
3. Loan Modification (work w/the lender to drop the interest rate)
4. Short Sale (sell the home for less than is owed)
5. do nothing and foreclose. (the worst option)

(There are other options like a forbearance, deed in lieu, etc. but these aren't as common, nor as viable an option for most North San Diego homeowners)

So what does the future hold? Tough times ahead for North San Diego real estate market. According to the number of resets (loans about to adjust upward) we can see 2009 will have thousands of loans coming due.




NOTE: This doesn't mean you can't sell a home! This simply means you must have an expert on your side that can help you through this tough market!!!!

For buyers, you couldn't have picked a better time to buy a home! Prices have dropped a ton, interest rates are fantastic!

Call me for a free evaluation of your real estate situation and we can develop a winning plan for you!

All the best
Marc

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Everything you need to Survive and Thrive in the current North San Diego Real Estate Market, go to http://www.MarcVonMusser.com

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