Short sale question- impact on neighborhood and other options.
Here is our scenario:
Principal loan: 283,000 (approx)
Current comps: 180,000-203,000
My husband's job just moved him almost an hour from home. He is taking a dramatic pay cut, possibly qualifying us for hardship. I am also being considered for a new position that would increase my commute significantly (although I realize this is a choice). Most of our family and friends live on the other side of town as well... the only reason I mention this is to illustrate our thought process...basically work and life are occurring on the opposite side of town. We are considering a short sale. I am the only one on the loan, so only one of us would be impacted in terms of credit. We've considered going for a principal reduction and trying to rent out our home... does the bank put stipulations on renting? We are on the outskirts of town, so the rental option could be bleak anyhow. Is the impact on the neighborhood the same with a short sale and foreclosure? Any advice would be great! Thank you
A short sale is for someone who is BROKE. You do not sound broke.
A short sale is for someone that needs to move out of the home due to circumstances beyond their control - yours do not seem to fit that either
I know this will not be popular--just suck it up, make it work. If your home APPRECIATED to the same extent, would you be going to the bank trying to GIVE them money?
Charlie,
I am sorry to hear about your situation. Your first step here is to call your bank, they will let you know about the alternatives you have and their requirements. Your husband's situation will probably have no impact since his income was not used for the loan qualification.
If the bank can not give you an acceptable solution and you can not keep the house, then a short sale will be a less harmful alternative to a foreclosure. Of course avoiding either of them is preferable. As you already know a short sale will also affect the borrower's credit score.
Please let me know if you will need more detailed information.
Carlos J. Ramirez, PC, ABR, CNE
Short Sale / REO specialist
Associate Broker/Realtor, HomeSmart -
http://www.SmartAZRealty.com
Thanks for the fine quality of the information you've provided. Here is my take:
Short sales are one of the principle options many people in your situation are exploring. If youi go that route, I strongly suggest working with an experienced agent as well as contacting an attorney who specializes in short sales and loan modification.
You mentioned trying to get a principal reduction. The odds of this happening are very low. Last numbers I saw indicated less than 2% of the loan modifications include a reduction in principle.
Based on recent market statistics provided by the Cromford Report, short sales have less impact on neighborhood market values than foreclosures. Recent sales indicated the average short sale in Phoenix sold for $87.00/sq.ft. verses $69.00 for foreclosures.
I've written several articles about short sales on our real estate blog site that may give you more insight and information. Simply go to http://urbanlifeblog.com and use the Google search tool to get a list of the short sale articles. The Google tool is located in the right hand column. Simple type "short sale" and the articles will come up for your review.
Hope this is helpful.
Gene
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