The past few years have been extremely difficult for many people in the Mystic Country region of CT as well as the rest of the country. I am often asked about the opportunities presented by foreclosures, short sales, and REO properties. Donâ€™t get me wrong, there are opportunities, for those people who have weathered the storm, but I want to focus on those people who have fallen into hard times and are looking for solutions.
After much thought, and countless hours of research, I must point you in the direction of a â€œSpecial Reportâ€ posted by the Real Estate Radio Guys entitled â€œWhat you must know before attempting a loan workoutâ€ This 18 page report is extremely informative and will guide you down the right path in making the best decisions possible before you contact your lender, attorney, or real estate professional. Please paste the following link into your browser to receive the report:
To those people who inevitability must lose their properties, I offer you this advice. Meet with a knowledgeable real estate professional and get your property priced correctly and on the market. Let me offer you the following example:
Suppose that you owe $300,000 on your property but fair market value is $200,000. You are what we call â€œunder waterâ€ You owe more on the property than it is worth. You place the property on the market and receive an offer for $195,000. You then take this offer to your lender and ask them to approve a short sale. Yes, you will have had to do everything outlined in the Real Estate Guys Special Report including the documentation of a hardship. The bank turns you down and you lose the buyer.
You may have just mitigated your losses. Letâ€™s say that the market continues to decline and a year from now you get another offerâ€¦only this time it is for $150,000. The bank acceptsâ€¦.what are you liable for? You can argue that a year ago you had a ready, willing, and able buyer for$200,000â€¦.. $45,000 more than they just accepted. You may also want to point out that all the fees paid by the bank over the past year are solely the responsibility of the bank since your clock stopped the minute you brought the $200,000 offer to the table. Food for thought.