Fold or Call? A Game Changer….

Real Estate Agent with The Alliance Group Real Estate Services 01298719


It was quite a run.  How many times have we heard that one when we remember the “good old days” of Real Estate.  Throughout America there exists a sector of Real Estate “players”.  A group of individuals who highly profited from the Real Estate run up of the last decade.  Sometimes, investing in any type of financial investment including Real Estate feels like a bit of a Poker Game.  It’s a calculated risk.  But you can’t win big unless you get in the game, right?

And so you did.  Perhaps you began by looking to buy your first home in the early 2000’s.  Maybe a condo the size of the apartment they had previously been renting.  A little more expensive, but the tax benefits and the pride of ownership far outweighed the difference.  As a bonus, you began to realize that there was something else happening…..equity gain.  And, after a couple of years your little condo was now worth a lot more than you bought it for.  As a matter of fact, you could sell it and move to a larger place using the equity gain as the down-payment and your payment was the same.  You won that hand!

And the dealer keeps dealing.  Next hand, another winner.  And each hand, you sit a little taller, get a little more confident as you just can’t lose!  Many people just kept buying every two years and were becoming “seemingly” millionaires in the process.

This is called a winning streak in Poker or Investing.  But, as we know, what comes up must come down.  When that stinker of a hand gets dealt, the eerie stillness sets in as you try to figure out how to keep acting like everything’s peachy when you know you are starring at a losing hand.

In investing and in poker this is the moment when you have a choice.  You can fold, like our clients Josh and Hailey, who sold their home in 2008 by requesting a Short Sale from their lender.  They had paid $610,000 in 2007, had a financial set back and saw nothing but trouble ahead.  Instead of bluffing, they folding quickly and move on.  They sold their home, rented an affordable home in the area, and today are shopping in the same community they previously bought in.  With one massive difference. The homes that were $610,000 are now priced in the mid $300’s to low $400’s.  Yes, the same homes on the same streets.  And, the good news is that there is still time for you to have a similar success story.

Most people who purchased homes especially in 2005-2008 with Stated Income Loans are bluffing.  Sitting on hundreds of thousands of useless debt, paying every penny they earn on interest on a loan that has most likely been sold for pennies on the dollars to a different bank who is making insane returns.  If you are starring at this horrible reality, you are bluffing no one but yourself.  If your lender qualified you for a loan that you couldn’t afford it is time to realize that the bank has already folded and moved on.

The Banks do not feel embarrassed or victimize by giving you that loan.  They do not feel too proud to look at their situation objectively, decide what is best for them, and do what ever needs to be done to benefit the most from this situation.

If you are in too deep you’ve been bluffing long enough. For once, I am recommending you do what the banks are doing.  Fold now, by walking away with dignity. This is called Short Sale.  It’s like folding before you have to reveal your hand.  No one will know the difference between you requesting a Short Sale and simply deciding to move.  Know that “letting the home go” is NEVER a good idea for you as a Home Owner.  The banks will never forget this and will find a way to profit from this decision.

Our mission is to help you with this very specialized transaction.  Our processes are in place, we are well connected with the Banks, and we know how you feel right now.  Please visit us for more information about selling and planning your success story.

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Comments (3)

Dick & Sandy Beals
Wilmington Real Estate 4U Wilmington, NC - Wilmington, NC

Nice post!  Your phone should start to ring off the hook.  Too bad consumers don't get the message, and move on

Dick Beals

Apr 07, 2011 06:57 AM
Lucas Whalen
Stonebridge National Lending - Blue Springs, MO

Nice analogy.  Lets hope we can trun the corner soon.

Apr 07, 2011 07:00 AM
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Folding a losing hand is a great analogy.

However, most borrowers who need a short sale now weren't gambling then. They were just buying at market value because they needed a home in 2004, 2005 and 2006. The market crashed around them. They suddenly were holding a losing hand in a game they didn't even know they were playing.

Apr 07, 2011 12:48 PM