How Can a Homeowner Compete with Deflated Bank Pricing? Short Sale (Payoff)

2008-07-13T12:21:00.000-07:00

A short sale may be a viable option for a home owner in danger of losing his or her home to a process known as foreclosure. Currently, it seems that nearly a quarter of the sales are being performed by agents with listings that are owned by banks, known as REO properties. Unfortunately, this has had a brutal effect on sellers who "need" to sell their homes.

Example: Seller, Ms. Somebody, came to Lake County two years ago. Prices of homes in the North Bay were outrageous. It would be simpler to just buy a brand new home outside her area of employment. Yes, the nice country community just over the Hopland Grade was awe striking to say the least. Ms. Somebody knew she wouldn't even notice the length of time it took to drive since the scenery was so beautiful. It would be like meditating she had thought.

Now, Ms. Somebody has made the reluctant decision to move in with her elderly mother, whose health is failing. Ms. Somebody would have preferred to move her mother to Lake County where life really is enjoyed at a slower pace. But, Ms. Somebody's mother was plugged into her community with its health care provisions. Ms. Somebody's employer was located only two blocks from Mother's house and gas prices? When will the gas prices stop rising?

How did Ms. Somebody know gas prices would nearly double in two years? How could she have seen that the impact gas prices would have on the number of commuters willing to purchase in Lake County. Even worse, how did she know the pending home loan crisis would decrease the value of her beautiful, nearly new home?

When Ms. Somebody contacted Ms. Realtor® to get a good price for her home, Ms. Somebody was appalled. "That's more than 1/3 less than I paid," she complained to Ms. Realtor®. How could Ms. Somebody have known that there was a new seller, one more motivated than her and other owner occupied sellers, just on the horizon?

Who is this highly motivated seller? The Bank. The bank knows how to price property to sell it and sell it first. The bank prices the property 10% under the current market value. Every time a bank owned property sells, decreasing the market value of homes coming onto the market, another home seems to foreclose. Another home and another enters the competition, whose owner is the bank, deflating the market and pricing their property to sell before any other property on the market.

With fewer buyers in the marketplace and more homes on the market what can Ms. Somebody do? Mother's health care costs are impacting Ms. Somebody's budget. She is now two months behind on her house payments and she doesn't even get to go home. But, how will she sell? She can't possibly compete with the banks at these prices. Or can she?

A short sale may be but is not always, a viable option for a homeowner to take if he or she would like to sell their home rather than watch it foreclose. There are certain criteria to be discovered to see if this is a good choice. In the fictitious example of Ms. Somebody, short sale was a good alternative to foreclosure. Ms. Somebody only had one loan. Her hardship was proven. She competed with the banks, pricing and listing her home 10% under current market value. A buyer found the excellent deal online and put in an offer. The wait was long, but the lender approved the offer and released Ms. Somebody from her deficiency. Ms. Somebody's credit was adversely impacted, but not as bad as it would have been had the bank foreclosed.
If you are facing a foreclosure in California and you would like to know if a short sale would work for you, contact Anne Baker at ambakes@gmail.com. I use a company who is able to perform the viability check to see if short sale is right for you. Best wishes.

Visit my Web site www.AnneMarieLakeHomes.com.

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How Can a Homeowner Compete with Deflated Bank Pricing? Short Sale (Payoff)