After all of these years, the subject of foreclosure and short sale remain the most difficult conversations I have with homeowners. Even when someone calls me for advice, I can still hear the pain in their voice. I can honestly say that I have never spoken to a homeowner who was not hurt by the thought or belief they were going to lose their house.
Yes, we are experiencing record foreclosures. Here in Gwinnett County at the time of this writing, we are averaging 2,000 per month and are expecting approximately 350,000 by 2014. With an exception of a small percentage of strategic foreclosures, the vast majority of homeowners are struggling with the reality of losing their home.
Now that we know there are many others in the same boat, let’s be clear and frank. After speaking to many homeowners including family members and close friends, your house is only bricks and sticks. I don’t know how else to say it. If you have ever lost anything of significance, you probably realize your house is only an object. I know it carries memories and if the bank only knew they would allow you to stay. However, after buying and selling hundreds of homes, I realize that the house is either an asset or expense. That leads us to our topic.
Why a short sale? A short sale is nothing more than the lender taking less than what is owed on the property. The lender will decide what the house is worth right now in its current condition. If they can sell it as a short sale for more than they can foreclose and sell it at a later date, they will. It’s that simple. The house currently is an expense to the lender.
If you would like to compare the differences between a foreclosure and a short sale, look immdiately to your right and click on Foreclosure Alternatives. That is the most up to date and best comparison I have seen.
Now that you know what a foreclosure or a short sale means to you, let me explain what they do to your neighborhood or subdivision. A short sale will allow someone to buy a home at a discount. This will serve the new owner with a great property at below market value, save your credit by not having a foreclosure, serve your lender by removing an expense from their books, and will keep your neighborhood from having a vacant house for months or even years. Yes, it will reduce the average selling price in the neighborhood, but not as much as as foreclosure that sits vacant for an extended period of time.
Let me give you several examples. We purchased a house in a subdivision that had several foreclosures. We looked at all of them. The one we bought was a foreclosure. There were 4 in the subdivision at the time. One of the houses sat on the main street with a broken window and grass up to your knees for years. This affected everyone’s values. After 3 years of sitting vacant, it finally sold for one of the lowest prices bringing everyone’s prices down. After all 4 sold, the value of the entire subdivion fell by over $100,000. Last week, I viewed a house in one of the nicest subdivisions in our county. The house had been foreclosed on nearly 3 years ago. After someone removed every closet shelve, every faucet, every kitchen cabinet, every knob, they decided to remove the kitchen drain while leaving the water on. The house flooded for over 60 days. The house orignally appraised and sold for $1.2 million. It’s currently on the market for $256,000. The neighbor’s house was valued well over $600,00. I could go on and on.
Many of the homeowners I work with have reached a point of frustration that adds years of grey hair. I do find that it is my responsibility to share the damages that a foreclosure does to everyone including the neighbors as well as your credit. Before you throw up your hands and walk away, let me assist you in working with your lender to arrange a short sale. If your house and you qualify for a short sale, I promise you will be happier in the end!!!
Feel free to contact me at rob@4thavenueproperties.com or call 678-835-8577. If you would rather fill out the form below, we will contact you as soon as we receive your information. Give me 5 minutes to see if I can help.