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By E. V. Small

February 14, 2013 (San Diego)--If you are a homeowner who is underwater and/or behind on your mortgage payment , you probably feel as though you have very few options.  Believe it or not, you might just be in a better negotiating position than homeowners with equity and their home and who have made all timely mortgage payments.

Short Sales have become the most profitable method for real estate investors to acquire inventory. The banks are very reluctant to foreclose on properties right now due to the numerous lawsuits involving “improper” paperwork. In fact, ten major banks including Wells Fargo, Chase, and Bank of America recently settled a foreclosure lawsuit for $8.5 billion. See  Ten Banks Settle for 8.5 Billion- AP

The competition for your business is fierce. You may have already received flyers on your front door, literature in the mail, or even phone calls from various marketing companies claiming that they have a cash buyer ready to purchase your home.  Their goal is to convince you to sign a real estate listing agreement with their real estate agent with sales pitches like:

 “We can close the deal quick because it’s an all cash deal.”

Fact: It doesn’t matter if it is a financed sale or an all cash deal,; the amount of time it takes to get a short sale approved averages well over 70 days.  It is solely up to the lender to approve the offer and their process is rarely influenced by cash.

“You really should move quickly because once your property is in foreclosure your credit will be ruined for years”

Fact: Unless you are current on your mortgage, your credit has already been highly compromised. A short sale will have the same restrictions in mortgage financing as those who have completed the foreclosure process.

Why You Benefit

Many homeowners have been allowed to miss several months, if not years of mortgage payments because the banks are not actively pursuing the foreclosure process.

Because so many companies want the right to list your house, you can negotiate your relocation expenses. Make sure to negotiate your ‘relocation expenses’ before you sign the listing contract with their agent. I have seen ‘relocation’ assistance payments range from $3000-$30,000.

BEFORE you consider a Short Sale on your property, make sure you explore all of your options.

  • Special governments refinance programs such as HAFA or HARP – There are several government sponsored programs that assist struggling homeowners in various ways.
  • Bankruptcy – This process can eliminate most if not all of your consumer debt and protect your home from foreclosure.
  • Loan modification – This process can lower your mortgage payment as much as 50%, and you do not have to be current on your mortgage payment to qualify.

If successful, any of the above options will allow you to remain in your home.

If you have specific questions about your current situation, please feel free to contact the author of this article at info@smallworldms.com or 888-938-5453.

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