Short Sales: If You Bought At The Market’s Peak, Does It Make Sense To Short Sale Your Home?

By
Real Estate Agent with RE/MAX Action
IL – Many homeowners bought their home at the peak of the market. In the hardest hit areas, they paid $500,000 for homes that are not selling for $250,000 (or even less.) Their home is costing them $4,000 a month. (That is the total after paying property taxes and insurance.) Renters have moved into the neighborhood and are paying less than $2,000 to rent a comparable home. It just seems like these homeowners are getting an unfair deal all around. Should these homeowners dump their homes in favor of a lower priced home? Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here. Some people say No! “That is breaking your word. If everyone did it, just think of what would happen?” they say. There is a little problem with that logic. Many of those homeowners see everyone else taking advantage of the system. It has gotten so bad that in some neighborhoods most of the homes have been abandoned. Why shouldn’t a homeowner do what is best for themselves? After all, they can save hundreds of thousands of dollars. Let’s say they short sale their home with a $500,000 mortgage, rent for 2-3 years, and then buy later. But, what if home prices appreciate over the next few years? If they are already upside down by 50%, then it still makes financial sense to short sale now. If the housing market has improved by 5% a year, their $250,000 house will have increased to $289,400 in three years. That is still much less than $500,000. In addition, they will save even more on interest payments. I am not recommending they do anything. I just want to lay out the benefits and leave the decision up to them. Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at dtoomey@remax.net. I will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (847) 338-0180 Discover how other sellers successfully completed a short sale and request a free consultation by clicking here. Thinking about a loan modification? Our loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy. Thanks for reading this, Dennis Toomey. Dennis is a Real Estate Broker at RE/MAX Action. Short Sales Realtor: Phone: (847) 338-0180. dtoomey@remax.net. For Real Estate that's hassle free, just pick up the phone and leave it TOoMEy! View My homes for sale at www.HouseByZip.com. Dennis Toomey specializes in loan modification assistance and short sales in Elgin Illinois. Elgin Loan Modification Help, Elgin Short Sales. Elgin Short Sale Realtor IL Short Sales. Realtor. Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Dennis Toomey's personal views and do not reflect the views of RE/MAX Action. This information on Short Sales: If You Bought At The Market’s Peak, Does It Make Sense To Short Sale Your Home? is provided as a courtesy to our viewers to help them make informed decisions.
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Rainmaker
1,145,195
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert

I think if you are in a situation where the finances show do a short sale then you do, but I dont know about doing one if your finances are in good shape.

Feb 21, 2011 11:58 PM #1
Rainmaker
114,299
Laurie C. Bailey-Gates
Robert Paul Properties - Barnstable, MA
ABR, SFR

I believe short sales are only effective if you can prove financial hardship.  It doesn't sound like the case in the scenerio you just presented.  In addition, you never talk about the financial impact a short sale will place on people's credit scores.  It could take several years to repair their scores.  In addition, the bank may require they sign a note and they may not have total forgiveness with a short sale. 

I think you need to explain to them all of their options, but also, all of the ramifications of doing a short sale.  Short sales are not for everyone.

Laurie

Feb 22, 2011 12:12 AM #2
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