Northern Nevada Homes For Sale ... Luxury Home Short Sales

Northern Nevada Luxury Home Short Sales

The continued economic plight is affecting people that thought they were "set for life", those with substantial incomes and assets. Many such folks have experienced severe reductions in their stock holdings, business profits, and other revenue sources. Often they are now carrying adult children or older parents that are also negatively impacted by the economy and not able to continue without their support. Regardless of the reasons why, they are finding themselves in the delicate position of having their Luxury Home real property debt obligations become a burden to them.

We are using the phrase Luxury Home in this case simply to describe an expensive home, or a home with very large debt service. It doesn't take much of a cash flow interruption to affect a $5,000, or larger, monthly payment. For years they were assuming the market would recover and they did what they had to do to carry it. They spent their savings, sold other homes, stock, etc. It's all gone in an effort to wait it out. They are now at a point where they owe more than the property is worth, whether a second home, or their primary residence, and to Short Sale their Luxury Home could help them through these trying times.

A Short Sale is a sale where the proceeds of the sale are insufficient to pay off the loan balance. The primary objectives for a Seller in a Short Sale are to avoid a foreclosure and have the lender agree to forego any deficiency action rights. Another major Short Sale benefit is that it doesn't go on County Records like a foreclosure. Foreclosures are a matter of public record forever - something to avoid if you are a public or prominent figure, in need of a security clearance, or concerned about reputation for business reasons. Though both are quite common now, there are significant stigma differences between Short Sales and Foreclosures with a Short Sale being the preferred alternative if it is put together correctly.

The "luxury" short sale situation is different for several reasons beginning with the types of properties and loans. While many owners in lower price points used their home like an ATM machine over the years, pulling cash out as the values went up with little equity, the luxury homeowner had to make a significant down payment to get their Jumbo Loan, often $500,000, or more. The result is that though the numbers may seem large, percentage-wise they are less than properties in lower price points for there was more equity to begin with. For example, a $100,000 shortfall on a $800,000 sales price vs. $125,000 shortfall on $120,000 sales price as frequently occurs in our market. The Jumbo Loan also has a higher interest rate, if more incentive is needed.

Our Advice: If you need to sell your "Luxury" home don't be afraid of the Short Sale. No one knows how long it will be before the values return to a point where you can sell conventionally, and the carrying costs will not diminish. Do what you need to do for your family and explore the possibility for you and your situation with a professional Short Sale agent. You can minimize the risk of losing other assets, minimize the negative credit impact, and keep the neighborhood happy by maintaining your home in good shape during the process. Short Sales are good for Sellers, Lenders and Buyers these days, even it is a "Luxury Home".

When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless!

Lisa Wetzel and Jim Valentine are real estate agents with RE/MAX Realty Affiliates in Gardnerville. They are short sale and foreclosure specialists and certified distressed property experts.

Contact them at  

carsonvalleyland@hotmail.com www.carsonvalleyland.com