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I can't pay my mortgage, my house isn't worth what I owe, what can I do? New Milford, CT Real Estate Talk.

By Andrea Swiedler

Real Estate Agent with Berkshire Hathaway HomeServices New England Properties Licensed in Connecticut

January 29, 2011 12:29 AM

I can't pay my mortgage, my house isn't worth what I owe, what can I do? New Milford, CT Real Estate Talk.

Short sales new milford ct There is something you can and should do. Get in touch with a Realtor® who can assist you to sell your house "short". Be very careful to find someone who understand the short sale process, who has been successful in getting short sales approved and closed, someone who will tell you the truth about the value of your home as it relates to the current real estate market.

Tough talk ahead. I see homes listed all the time for more than they are worth in today's real estate market. Believe me, when I have a buyer interested your home I am now investigating EVERYTHING! Not only am I checking at the building department to make sure you have permits for all those updates and additions you have done, but I am also taking a few extra steps. BEFORE my clients put an offer to paper, I am checking to see if I can figure out how much you might owe on your mortgage, how many mortgages you have, I am actually checking to see if there is anything on file with the CT judicial system, in case the foreclosure action has been started.

If I have a potential buyer for your home. I will be advising my buyers not to put an offer in on your home if you are listed too high, if there is no notation this is a short sale. Short and sweet. If you, or your agent do not want to admit that you are in a short sale position, we are moving on. I am seeing homes like this languish on the market, expire... and then... foreclosure. THIS DID NOT HAVE TO HAPPEN!

You are having trouble paying your mortgage, you call in a few agents, this is what you might here from some, but not from me.

How much money to you need to get out of the sale?
What price do you want to list at?
Let's throw it on at what you need to satisfy the debt and see what happens.

Some may not even ask you if you are in trouble or what you owe! I am asking everyone what you owe up front. I have to know. If you want to list your house high and run the very real risk of losing it to foreclosure, I am not the agent for you. If you want to hear the truth, please feel free to contact me. Foreclosures are expected to rise 20% in 2011 overall. Why not do everything you can to avoid this?

Short sales in New Milford CT can and do work. First, you have to face the reality that you owe more than your house is worth. Next, you have to face the fact that prices of homes are down in our area, so what you want or need to get out of the sale of your home in New Milford CT has NO relevance to what it is worth. NONE. This is the hardest concept for struggling home owners to grasp. The goal of a short sale is to sell you home as quickly as possible for the best price possible. The current real estate market and the condition of your home will determine the best price possible.

You do have other choices if you can no longer pay your mortgage.

You can contact your lender and try to do a loan modification. If you no longer have the ability to pay, this probably won't work.
You can ask the bank to take the house back, called a deed in lieu of foreclosure. You won't be "on the hook" for the balance left after your lender sells your home, however it can cost you up to 250 points on your credit score.
You can do nothing. The lender will eventually foreclose, you could be responsible to pay the difference between what you owe and what the house sells for, and your credit score can take a bit hit.

I would suggest you contact an attorney to discuss all the options available to you, including bankruptcy. If you and your attorney determine that a short sale would be the best way to go, contact a Realtor® who has successfully negotiated short sales. They can and do work.

If you live in the greater New Milford, CT area and are no longer able to pay your mortgage, call me at 203.460.1775. I will discuss your short sale options and give you the names of some local attorneys who can discuss your best options with you, I have been successful at closing short sales. But so something! More than anything else, please remember that you are not alone.

I can't pay my mortgage, my house isn't worth what I owe, what can I do? New Milford, CT Real Estate Talk.

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Sally K. & David L. Hanson

EXP Realty 414-525-0563 - Brookfield, WI

WI Real Estate Agents - Luxury - Divorce

Before you choose a realtor....make sure that they have had the education and successful experience to complete a short sale....not what they say...but what they can show they have done.Amen....and Women.

Jan 29, 2011 12:31 AM

Andrea Swiedler

Berkshire Hathaway HomeServices New England Properties - New Milford, CT

Realtor, Southern Litchfield County CT

Good morning Sally and David, Amen and Women is right! I have spent many a tough conversation with fellow agents warning them to get ready.... ran into one the other day who didn't know the difference between REO and short sale. This killed me! They are often as resistant as the struggling home owners themselves.

Jan 29, 2011 12:34 AM

Dawn Crawley

Dawn Crawley Realty - Pinehurst, NC

Find Pinehurst Homes

Great blog post explaining the reality of the situation. I don't know how many times I hear "I need to get this out of the home".

Jan 29, 2011 12:34 AM

Ed Silva, 203-206-0754

Mapleridge Realty, CT 203-206-0754 - Waterbury, CT

Central CT Real Estate Broker Serving all equally

Andrea, there are so many out there that have just decided that there's nothing they can do and just do nothing. There has to be a post like this repeated often to get the word out.

Jan 29, 2011 12:36 AM

Andrea Swiedler

Berkshire Hathaway HomeServices New England Properties - New Milford, CT

Realtor, Southern Litchfield County CT

Dawn, as long as they contact someone who will tell them the truth. It is all over. Sad but true.

Ed, yes there are. And that is just not right. And to compound the issue, they may call someone who really has no clue....

Jan 29, 2011 12:37 AM

TeamCHI - Complete Home Inspections, Inc.

Complete Home Inspections, Inc. - Brentwood, TN

Home Inspectons - Nashville, TN area - 615.661.029

Andrea, sadly, many are in the same boat...

Jan 29, 2011 12:48 AM

Bill Gassett

RE/MAX Executive Realty - Hopkinton, MA

Metrowest Massachusetts Real Estate

It is interesting you are seeing people doing this Andrea. In my world when someone is behind on their mortgage and they have bought in the last 5 years they know with certainty they need to short sale or they will be in foreclosure. There is no trying the market at unrealistic prices etc. Do all the Realtors in your area have their head in the sand?

Jan 29, 2011 12:49 AM

Jon Zolsky, Daytona Beach, FL

Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL

Buy Daytona condos for heavenly good prices

Andrea, we are following court cases for properties that we find of interest for 2 years already, and we keeep the history. It is taking a lot of time, of course.

OUr biggest problem is an agent. If an agent thinks that his goal is fetch the highest price, there is nothing you can do.

If they are thhinking in terms of benefit to their clients, that \'s a different story, and we have a good chance to do the deal.

Jan 29, 2011 02:50 AM

Anna "Banana" Kruchten

HomeSmart Real Estate - Phoenix, AZ

602-380-4886

Andrea we have been dealing with shorts and reo's for well over 3 years now. At first sellers didn't believe their homes lost so much value - that just couldn't be right and they'd move (as would I). Now over 60% of all sales are distressed properties. Training and education is key of the agents who take distressed properties on. Here is AZ the property a short sale or reo must be disclosed and we have a short sale addendum (plus many other forms) outside the scope of the AAR contract forms.It is a totally different type of listing - from the first call on and we do have several sttorneys and cpa's on our team as that is critical for the client to now what could happen is each scenario.

BPO's have been a problem for us - many banks are wanting 'market' value or more for short sales and we're in direct competition with foreclosures prices/closing. It takes a LOT of work and guts to work these deals.

Jan 29, 2011 05:28 AM

Jack Mossman - The Nines Team at Keller Williams in Stockton

The Nines Team At Keller Williams - Stockton, CA

The Nines Team at Keller Williams in Stockton

Andrea - Fortunately for us in California, the "short sale" is a material fact and must be disclosed. Like Anna (#9) we have had long years of experience in this process ... and it is never "routine." You can put systems together ... that sometimes even have high possibilities of success .... but avoid the interpersonal relationships of the agent and the seller. Over time ... agents may make a fair amount of money ... but when this market stabilizes (and it will) will they have the reputation of someone who cared?

Jan 29, 2011 06:48 AM

Steven L. Smith

King of the House Home Inspection, Inc. - Bellingham, WA

Bellingham WA Home Inspector

Andrea,

Makes sense. I have seen situations where the distressed homeowner resisted this and, in the long run, simply lost it all anyway.

Jan 29, 2011 06:51 AM

Andrea Swiedler

Berkshire Hathaway HomeServices New England Properties - New Milford, CT

Realtor, Southern Litchfield County CT

Michael, yes indeed they are.

Bill, the problem is that agents need to be honest with their pricing. I have asked, before showing, is this a short sale? Knowing the house was overpriced, knowing what they paid.. the agents have said.. oh no, of course not. Very frustrating. My last short sale (which I spoke to you about) the home owners interviewed 6 agents before me. I was last last last. I was the only one that asked if they were in trouble... only one that brought a short sale packet for them, only one that suggested I speak to the lender up front to make sure they wouldn't make them list for a period of time at a price to satisfy the debt. Some told them to "throw it on at a price to pay off the loans and commissions... that was the majority of the answers. And that was not long ago... You tell me where their collective heads are. The sand? Or elsewhere...

Jon, exactly. If agents can't be honest, or don't understand, then they need to quit the business. Their lack of understanding only makes things worse.

Anna Banana, we certainly didn't get hit that hard here, but the wave is coming.. But it is the agents that need to be educated and be honest.

Jack, here too. But if you are told the house is worth more... if you are led down the wrong path by a professional... that is not good.

Steven, yes indeed. They will lose everything and it is very sad.

Jan 29, 2011 10:02 AM

George Souto

George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT

Your Connecticut Mortgage Expert

Andrea, very good advice here. And I agree, it is very tough to get a Seller to understand that there is "NO relevance to what it is worth"

Jan 29, 2011 11:49 AM

June Tassillo

Owner/Broker RE/MAX Elite Realty - Franklin, NC

Let me help you with the next phase of your life!

Andrea ~ Good job explaining how we have to get truthful with sellers. Neither way is not pain free for the seller. Every situation is different and we need all the information they can give us but it take a good agent like your self to ask the questions.

Jan 29, 2011 01:12 PM

Bill Gassett

RE/MAX Executive Realty - Hopkinton, MA

Metrowest Massachusetts Real Estate

So the answer is yes the heads are in the sand:) In Mass you have to disclose when a home is a short sale. So the simple question always is "do you have the money to bring to closing". If the answer is NO it is a short sale - end of story.

Listing a short sale for the mortgage balance, fees etc is fiction. That is what the lender wants you to believe. I think this is one of your questions in my home work:) A short sale should be listed around market value period. Mortgage balance has ZERO to do with anything.

Jan 29, 2011 11:54 PM

Andrea Swiedler

Berkshire Hathaway HomeServices New England Properties - New Milford, CT

Realtor, Southern Litchfield County CT

George, it sure doesn't.

June, what kind of agent doesn't ask the question, that is what I would like to know.

Bill, we have to disclose here, at least as far as the MLS is concerned. But... the key is educating agents. I ask myself. I know there are those who are not asking, or if they are asking they are still so badly misinformed they suggest listing for a while at the full banana price. It is of grave concern to me and should be of grave concern to those sellers that are in trouble. (PS. I am anxiously awaiting your homework assignment, at your leisure of course, LOL. I feel like Oprah.. or Jay Leno... or perhaps more like Dave Letterman... not sure yet.)

Jan 30, 2011 12:14 AM