Yes, there are still buyers out there underwater. Things are getting better, but just because the flood waters have started to recede doesn’t mean that all of the land is out of the water.
English: Sign of the times – Foreclosure (Photo credit: Wikipedia)
Here are the choices that “under water homeowners” face if they need to sell… or just really want to sell.
- Short Sale – These have gotten much better over the last couple of years, and especially the last few months, but they are still tough and hurtful.
- They take a long time to process. While it isn’t the 2 years that they took not that long ago, don’t expect the bank to be done in less than 60 days… after they start looking at the offer. And they might drag it out for six months or more, only to end it all with a rejection.
- Credit scoring agencies look at a foreclosure and a short sale in EXACTLY the same light. So, despite all of the work that you, as a seller, may put into a short sale, the bank doesn’t care.
- Foreclosure – Stressful and kills your credit for two to three years… or maybe a little more, depending on what you do to recover. And for many, the stress of knowing that a Sheriff’s notice could hit the door any day can be pretty rough. It may be embarrassing, too. Many don’t want their neighbors to know about financial hardships they may be facing.
- Renting your home – There are a lot of folks out there we call “accidental landlords”. But it isn’t all flowers and unicorns…
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A credit card, the biggest beneficiary of the Marquette Bank decision (Photo credit: Wikipedia)
It might seem either like it doesn’t matter or nothing matters more, but you NEED to be able ot be cashflow positive… more in rent than house payments. And remember, insurance is a different game as a landlord than as a occupant.
- You need to be financially solvent enough to afford repairs on the home if needed.
- Keeping up with the house payments will take on even more importance. If you were to rent out your house and default on the payments… if the renter could prove that you knew you could default, they might take you to court… maybe not, but…
- Your mortgage likely includes language saying that if you move out, the mortgage is due in full. Again, the mortgage company may not care, but it is a risk.
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- Write a check – If you can pay off the shortage at closing, that is a pretty good option. But most people don’t have the resources to write the check…
If you are wondering if you are underwater, we can talk about it. I have an option for those that want to go the short sale route. If you are interested in renting, we can talk about that, too. I generally don’t handle rentals, but we can talk over the options.
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