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From all reports and my own observations - we're seeing the market start to rebound. Prices are still low and those properties that are priced well are seeing multiple offers. This is a good sign for the economy. Those buyers who were waiting for the bottom of the market - well it's here today and gone tomorrow.
I predict that the remainder of this year the market will continue to stablize and next year we should start to see a gradual increase in market values.
Those buyers who are still on the fence - I recommend you take that step to homeownership. Don't let fear drive you. Yes, it's a big step, but one that is well worth it. As long as you're making an informed decision and understand the terms of your loan, it's an investment in your future.
You've stressed and gone down every avenue you can to try to keep your house, but you're over your head! What can you do? Let the house go into foreclosure? Rather than ruining your credit, a short sale may be a viable option.
A short sale can be a dignified solution to a financial crisis. Many homeowners today owe more than they are worth! What is a short sale? In a nutshell, you owe more than the house is worth, and you find a buyer who's willing to purchase your home at today's market value, you ask the bank to take less than is owed to release the house so the buyer can purchase the house.
There are several qualifications for a short sale, such as:
You do not necessarily have to be behind on your mortgage payments for lenders to consider a short sale. While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency.
If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.
Foreclosure is a process, there is time to make decisions that may result in better outcomes.
The foreclosing party, in many cases a lender, can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.
It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, one out of five homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.
With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.
Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not.
If you decide that a short sale is a good option for you, please make sure your real estate agent knows what they are doing! It is imperative to hire a realtor who can help you sell your home. I recommend hiring a Certified Distressed Property Expert. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.
This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales.
If you're having problems paying your mortgage and don't know where to turn, there is help available! Before you get behind in your mortgage payment, contact your lender. Ask to speak with someone in their loan modification department. Make sure you make notes of your conversation with the department (such as the name, phone number, and outcome of call). Explain your situation (job loss, health, divorce, hour reduced, mortgage escalation) and ask for the documentation needed to do a loan modificaton or forebearance. With a loan modification, the lender should renegotiate the loan to a more manageable payment. With a forebearance, the lender would allow you a certain number of months where you wouldn't make payments, but those missed payments would have to be paid back over time.
Why would a lender modify my mortgage?
Lenders have realized that in some cases it is better for them to work with their current borrower to lower their payment or possibly improve their terms in order to keep them in their property. The average foreclosure can cost a lender from 35 to 50% of the value of a property (or more) so keeping a borrower in their home is better for everyone.
What do I need to qualify for a mortgage modification?
How do I qualify for a mortgage modification?
Prior to contacting your mortgage lender you can quickly complete an eligibility test at www.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government sponsored Home Affordability and Stability Program (HASP).
For a list of mortgage lenders and servicers with contact information your can visit www.HopeNow.org. If Fannie Mae or Freddie Mac owns your mortgage you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments.
What is a Home Affordable Refinance?
What if I Don't Qualify, Can't Afford My Home and Owe More than It is Worth?
You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment you may want to consider a short sale, A short sale allows you to sell your home for less than what you owe and avoid foreclosure.
RESOURCES - HUD APPROVED COUNSELORS:
All signs are showing that the market is starting to stablize. Buyers are coming out and are looking to purchase real estate. Prices are still down, which is good for buyers. I'm seeing multiple offers on foreclosure properties - and properties are going under contract in less than 10 days. As long as the banks don't flood the market with the foreclosures they have ... they trickle the foreclosures on the market, I think we'll start to see the market recover (increase) by year's end.
It's a great time for first time buyers to buy. With the government's $8,000 first time buyer credit and property prices down - don't wait until the market starts to increase - you'll miss the bottom of the market. We are, I believe, at the bottom and prices may start to increase by Fall.
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The area's most knowledgeable real estate professional. It gives me great pleasure helping my clients reach their goals. Serving Prince William Stafford Spotsylvania Fauquier Culpeper Counties
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