This is a great question. A lot of homeowners ask themselves this when they are first trying to figure out if this is the best option for them. Unfortunately a lot of home owners delay in making the decision to short sale. I would like to share my experiences and my expertise with you.
As most of you know, I have gone through the same thing your going through. My condo in Charlottesville is severely upside down and losing money each month. I thought I could tough it out and it was worth it in the end. Besides, I put a $30,000 down payment !! Then I watched my Father, who had bought 3 condos, waste away his savings and go to foreclosure on 2 of his condos. I said Now is the time to short sale. My financial future depended on it.
So why now ?
- The #1 answer is - stop throwing away your savings. If you are just barely getting by and most of your income is going directly to your mortgage payments and you can't start building for your financial future. Then its time. You can either come to this realization early on or after you have depleted all your savings.
- You have a true financial hardship. Lost job, Decreased pay, Divorce, ARM adjusting, Job relocating. These hardships you can not control. Most people end up doing #1 or they stop making their payments and are headed toward foreclosure. Foreclosure and Bankruptcy should be a last resort option. These can affect you financially for a very long time. Short sale is a way to avoid these.
- The government is pushing short sales now with bailout programs for the banks. The IRS mortgage debt relief act ends in 2012. This means if the short sale home is your primary residence you do not have to pay taxes on the debt forgiven (*I am not a tax advisor, please consult your tax advisor on this) It could be much harder than it is now to get a short sale approved in the coming years after these government programs are all gone.
- One of the main reasons you bought your home was to stop renting and throwing your money away and build your financial future. There are alot of other great reasons to own real estate, but this is one of the top. Now, because of circumstances you can not control, you are now renting again. But this time, its for a very long time.
If you are $200,000 upside down on your mortgage, then it will take 21+ years to catch up to the point where you owe what your home is worth.
If you don’t short sale now, you will still be a short sale in 10 to 20 years depending on how much you are upside down.
If you want to calculate how long it will be for you, jut figure out how much you are upside down on your home and then find the amortization schedule on your loan paperwork and see how many more payments you have to make just to break even. If you are brave enough, see how much it will cost you just to break even.
- So what about the strategic short sale? Someone who is well off financially and can afford to keep their home but it makes absolutely no sense to. Lets talk :) We have helped many homeowners in your situation.
You choose the right realtor! Less than 40% of short sales get approved nationwide. You make the wrong decision and it could cost you alot of money. Right now we are 15 for 15 since last year and should be adding 3 more in April. I like those odds! We can't guarantee we will get your short sale approved and the terms you want. But our results speak for themselves.
- Read our Homeowners FAQ's
- Contact us to set up a phone interview
- Fill out the short sale packet
- In home consultation
- List your home
- Sell your home
- Start over Fresh
