Negotiating a Short Sale! (Part 3) How To Stop A Slow Death from A Thousand Paper-cuts!

By
Real Estate Broker/Owner with Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate

 *This is Part 3 of a 6 Part Series on Negotiating a Short Sale. Click here to Read: (Part 1) & (Part2)

bleeding from a thousand paper cutsAre you Looking good on Paper but Bleeding Slowly to Death from a Thousand Paper-cuts?  Over-extension is the bane of life for many people.  Access to easy credit and low interest rates persuaded many of us that the right time to buy is NOW! 

Except that the NOW went on forever and the WHY or DOES THIS MAKE SENSE was rarely pondered with intense scrutiny.  If you could qualify, it was proof positive that you could handle it. Never mind that the standards in some cases were ridiculous (come on..no doc, no verification)  Most who are in this category have not defaulted..YET and don't want to. But stopping the bleeding will require some changes.

Here are some simple things which can be started Immediately to begin to get the situation under control.

1.  Stop Spending Money! 

  • Eat everything in your refrigerator and freezer before going grocery shopping.  Take lunch to work...this will speed up the ability to accomplish recommendation number one which is...Stop Spending all your money. Lunch money can easily top $100-$150 per month! 

 

  • Other simple changes that can be made right away are: Wear the clothes that you already have, sell the ones that you are no longer wearing. Have friends over to your house for dinner rather than going out.  This will probably create a much more enriching dining experience than anything that could be purchased at a restaurant! 

2.  Figure out Where the Money has been going

  • Honestly, most of us have no idea where money goes.  Using "plastic" to pay for stuff has a way of making it seem like we're NOT really spending money.  But you are! Going Cash Only...by this I mean, paying Cash for your purchases has a way of really clarifying the effect of a purchase.  When you fill up a gas tank for $100 and you take out a Hundred Dollar Bill...well, let's just say it has a different feel than putting the charge on your credit card.  You may begin to re-evaluate your NEED for a gas guzzling SUV. 

3.  Ask for help

  • Many people don't realize just how much assistance is available on-line.  Do your research.  Most banks are very aware of the growing crisis and are doing their part to offer assistance and creative solutions.  Now, since they tend to be behind the curve in situations like this...they're hoping that you won't mind bleeding to your financial death, or at least won't protest too much.  Don't be shy about asking them about ways in which they can assist you to stabilize your financial condition. You Never Know What They Might Say Unless You Ask!! 

4.  Have Your Current Financial Picture including your Present Mortgage Professionally Evaluated.

  • You may be in the wrong type of mortgage.  It may have sounded good when it was first presented..ie. Interest only products...but paying the bare minimum and increasing your debt load gets old after awhile.  The house does not get newer looking and it's no fun to be upside down on a loan because you've not been paying the principle. 

 

  • If you're in the position to do so, perhaps by saving money from suggestions #1-2, this is a good time to re-finance to a fixed mortgage even if you have to come to the table with some money.  No...DO NOT increase your debt! That's taking another step backwards.  There are a number of excellent loan officers who have their client's interest at heart.  If you need a recommendation, we'll be happy to provide one.

The steps described above can be very helpful in arresting the progress of a downward slide if you are having difficulty in making monthly payment obligations or have missed a payment on a mortgage.  It may still be helpful to have a comprehensive evaluation of your home's Value in the Current Market to keep all your options open.  If you would like a detailed comprehensive analysis of your particular situation, you can contact us through e-mail or by phone via this blog.

Click this Link to Continue reading more of the series

Copyright 2007 Audu Real Estate  All Rights Reserved

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Rainer
5,608
Julie McLaughlin
Staging Chico - Chico, CA
This is great advice!
Jul 14, 2007 06:32 AM #1
Rainmaker
387,817
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!
Thanks for your comment Julie. I'm glad you found the information useful.
Jul 14, 2007 06:38 AM #2
Rainer
80,957
Patrick Harfst
Realty Executives - Phoenix AZ - Gilbert, AZ

Lola,

If I were a buyer or seller inyour area, you are exactly the Realtor I would search out... alas, I'm far away, so will have to hope for a referral to you. Your spirit of "giving first" resonates through your writings, and I look forward daily to your next post... I saw the LibraryThing, and immediately went and got one of my own! Very cool - thanks!

Jul 14, 2007 11:18 AM #3
Rainmaker
387,817
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!
Hi Patrick, What an extraordinary compliment.  Thank You.  The Library Thing is really cool.  I absolutely Love the Written Word!  P.S.  Any and all Referrals are Deeply Appreciated! :)
Jul 14, 2007 12:40 PM #4
Ambassador
566,489
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team

Lola, great advice.  I could use them myself.  We have a bad habit of just buying something at the grocery store.  Just something.  The refrigerator is loaded, but we have to buy something.... my excuse is I don't have the taste for what I have at home.  Some of these are big things to do, break old habits and some are little but still hard.

I hope people that really need to read this - find it.

Jul 16, 2007 08:53 AM #5
Rainmaker
467,399
Midori Miller
Talk 2 Midori, LLC - Daytona Beach, FL
Online Marketing For Real Estate Professionals

Lola-very nice!  The Pre-foreclosure market is growing everywhere, I think many of the ideas are useful for everyone.  I have been budgeting and have come to realize many of the luxuries aren't so important, I do miss them from time to time but I have to say my fingernails are very nice natural (I miss my pedicures and nails sometimes, I think its the pampering).

You give sound advice... 

Jul 16, 2007 11:13 AM #6
Rainmaker
387,817
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!
Hi Midori, Thanks for visiting and sharing your thoughts.  Because the Pre-Foreclosure situation is not reflected in any public records, we tend to have a limited perspective of how pervasive this problem really is.
Jul 16, 2007 12:03 PM #7
Rainer
7,474
Carrie Perez
Elk Rapids, MI
MBA

Thank you for sharing! Consider this bookmarked!

Jun 17, 2008 03:56 PM #8
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Rainmaker
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Lola Audu

Audu Real Estate~Grand Rapids, MI ~Welcome Home!
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