Joseph Cacciapaglia

I know I have written a lot about short sales and loan modifications, and in New Jersey there are a lot of people who need one or the other, but recently I've been running into a different situation quite a bit. I've met several distressed homeowners lately that could not afford their monthly mortgage payments and were facing foreclosure, but they were sitting on a significant amount of equity in their homes. On the surface it may look like these people are better off than those that are in a short sale situation, but the decisions that they have to make are often more difficult. Do they risk losing their equity and further damaging their credit by continuing to miss payments in hopes that a something will change before the foreclosure, or are they better off selling their home quickly at some discount?

On top of that, if they do decide that selling is the best method should they use a real estate agent? This questions comes up a lot because many of these homeowners are receiving several letters from investors telling them that they'll buy their home all cash today. Now I don't have anything against investors; I happen to invest myself, but I know that I'm always looking to buy properties at a significant discount to their current market value. I've had clients who were offered cash prices at 30-50% discounts to the market, prior to speaking with me. I know that it is often tempting to end the situation quickly, but in my experience you can achieve a similarly quick sale if your home is properly marketed and you price it 5-10% below the market. In that case even with a 6% or 7% commission the homeowners will come out far ahead of where they would have with the investors' initial cash offers.

In the end, I always think it's best for the homeowner to make the decision that makes them the most comfortable. If they are willing to give up a significant portion of their equity in order to achieve immediate peace of mind, that is definitely their decision to make. Dealing with the foreclosure of your home in New Jersey, or anywhere for that matter, can be extremely successful, and I would never fault anyone for taking the quickest way out.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

I get this questions all the time, "I'm getting foreclosed on and don't qualify for a loan modifications, but if I sell my home I'll have no place to live." I realize that this is a concern that a lot of distressed homeowners have. In New Jersey, a lot of them have been told that they will be able to live in their home for up to a year before their foreclosure actually goes through. So, many of them believe that by selling their home in a short sale, they are speeding up the process of becoming homeless. From my experience, I would say that this is not entirely true, but it's also not entirely false. Sometimes homeowners are able to stay in their home for a very long time before their foreclosure occurs, but sometimes they don't. One of the benefits of a short sale is that you take back some control. By deciding to sell your own home, and working with the bank on the sale, you are better able to time your move.

Now many of you are thinking, 'yeah that's great, but where do I move?' Well, for most of my clients that really hasn't been a problem, but it has been answered in several different ways. Most either moved in with friends and family, or they have rented. These options are the same as when and if they got evicted after foreclosure, but it is usually smoother because they have a definite timeline and are able to plan. Many homeowners wrongly believe that they can't rent because of their credit, but that is simply not true. Often they may need a larger deposit, or have fewer choices, but there hasn't been a situation yet where one of my clients became homeless.

Now if the same homeowner waits and gets foreclosed on, their credit is usually worse and they are in a greater time crunch than before. Also, they may have to wait 10+ years before they can buy a home again, where some homeowners who short sale their home are able to buy a new home in as little as 6 months if their income situation has improved.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

I often have clients that are selling their home because they were told that they don't qualify for a modification. Often this is because their income is just too low. One of the ways that I've seen people remedy this problem is by using their home to create a little extra income. One woman rented out a spare room for a few hundred extra dollars a months, and this tipped the scales in her favor. Now this won't work in every case. Typically you would need other income and this just helps get you over the hump, but if you have the room it is definitely worth a try. As with any of my suggestions, always check with your mortgage company first, and also with any legal or other counsel that may apply.

If you have tips that have helped you get a modification, please let me know.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

I know 11:30 pm is an odd time to be writing and entry in my real estate blog, but something happened this afternoon that has kept me up tonight. I had an appointment today to list a distressed homeowner's home for sale, and I was stood up. This isn't the first time this has happened, but when I spoke with this gentleman earlier this week he seemed very interested in getting past this difficult point in his life, and I was really looking forward to helping him.

This experience really got me thinking about all the time that I've spent over the last year or so helping homeowners with loan modifications and short sales. What occured to me was this: In every situation that ended in a positive outcome, the solution arrose from the actions of the homeowners themselves. Myself and several other real estate professionals out there have spent a lot of our time educating home owners about their options, but at the end of the day they had to make the tough decisions.

I'm glad that those of you reading this have made the first important decision to educate yourselves about your housing options. I wish all of you the best of luck with the next step. If you are thinking that you don't know what that step is, I would suggest contacting a local real estate or mortgage professional, and asking for some free advice.

I once read that the majority of success comes from simply showing up. Unfortunately, I don't remember where I read it.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

Okay, I know I just posted something about short sales this morning, but I was speaking with a homeowner just now, and it made it really clear to me that people really don't understand what's in it for them. This gentleman had opted to file for bankruptcy and as part of the process was able to keep his home. Now he is paying his monthly mortgage payment along with a reduced payment for his consumer debt. He is still struggling and would like to sell his home, but at this point it is unlikely that he would be approved for a short sale. This is really too bad. He owed about $50k more than the home was worth, so he is stuck. If he had done a short sale he would have unloaded that $50k in negative equity, but now he is stuck with a home that he won't be able to sell for years unless he brings a check to closing.

I think that if he had understood that he could have done this, and then within a few years qualified to buy a new home, he would have been much better off. Unfortunately nobody told him.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com