When a homeowner contacts you to list their property for sale you have to ask some key questions to be able to determine your strategy.
In this current market most homeowners owe more on their property than it is actually worth due to the high increase of property values in Florida in 2004 and 2005. Most people obtained 100% financing to buy their property usually on an 80/20 loan with an adjustable rate mortgage (ARM). Today as we are all aware, the real estate market is struggling and most people that want or need to sell owe more than they can sell the property for.
As the foreclosure rate increases at an alarming pace more and more homeowners are in default on their mortgage or mortgages and these are the customers that are prime candidates for short sales.
Here is a general example of a short sale scenario:
The seller of a home owes $250k on a property where the best offer was only $180k. The reason why could be almost anything, lack of curb appeal, cost of repairs or as the current situation is now, a slow market making buyers more savvy to the offers they are willing to make because everyone wants a deal. So what are the seller's choices? They can sell for $180k and bring $70k to close the deal because the loan is upside down or you can put together a short sale offer to their lender.
Obviously the homeowner doesn't have $70k to bring to closing so ultimately the short sale is the answer.
One thing to remember; lenders will generally not consider a short sale unless the homeowner is in default of the payments. There are times when lenders can make exceptions but this is just a general rule of thumb.
UNDER NO CIRCUMSTANCES SHOULD YOU TELL A HOMEOWNER TO STOP MAKING THEIR PAYMENTS!!!!!!!!!
In general conversation with a homeowner you can determine where they stand financially and you can make your evaluation from there.
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