So many people, actually majority of peopleÂ in Arizona are upside down and are already in a desperate situation on their mortgage payments.
Right now everyone is saying we hit the bottom when it comes to housing. Unfortunately, for most of the people in Arizona who are already upside down the market simply is not going to recover in time to help them. I believe it will take aproximately 5 to 10 years before home values start going up at a decent appreciation rate. If you are one of the many strugglingÂ home owners, you will either have to stay there for a while or consider alternatives. The only alternative (the best of all evils) is a short sale. Think about it, if you're mortgage is $350,000 and today's value of your homeÂ is about $180,000, and let's say the home prices start going up at 4% rate right nowÂ (which we all know they're not even close to going up any time soon) it would take you over 12 years to catch up to your mortgage (break even).
Many of the struggling homeowners are being offered a loan modificationÂ butÂ unless theÂ bankÂ reduces your principal (which they will NEVER do) it will only extend your pain. They will lower your payment in half for a few years but you will still owe the original balance if not more.Â Going back to the previous paragraph,Â with the bank lowering your monthly payment in half, it would take you even longer than 12 years toÂ break even - which means you'll be upside down for a very long time.
Here in Phoenix, short sales are becomming more and more common every day and we are seeing the number of short sales rival the foreclosures on the market. Foreclosure is the worst evil for everybody, even banks.Â They will lose more money if a property goes into foreclosure, and your credit score and future possibility of getting a loan, will disappear for many years.
However, make certain if you are thinking of doing a short sale, that you seek someone who has educated themselves with the process and is very knowledgable and experienced in doing short sales. I believe a good indicator of a qualified professional is one who doesn't feel the need to charge the struggling homeowner in advance for their services. If they know what they're doing, they will be closing a higher number of short sales and they won't feel the need to charge in advance because they know they will get paid at the closing table. There are numerous ads plastered across the internet offering short sale services so please, beware of the upfront fees.
If you would like an evaluation of your situation with a greatly experienced, very knowledgable Realtor and you live in the Phoenix or surrounding areas, I will gladly schedule you in for a consultation. Just send me an email at firstname.lastname@example.org
. The only cost is a little bit of your time. I will be very honest with you and if you are not a good candidate I will definitely tell you that.
Thank you very muchÂ for reading. I hope this helps.