I contacted realtor in my area (I live in 07501 area of Paterson) and was told that she could put my house on

Asked by Raquel, Paterson, NJ Tue Dec 2, 2008

the market for no more than $275,000. I have a 2 fam home 3/br on each fl, 2 bath, living room, dining room on each floor. No driveway - on street parking. I bought this home for $319,000 3 1/2 yrs ago and refinanced and have a mortgage of $399,000 - I can't believe that it went down in value so much - I now owe more on my mortgage than what this house is worth. She can't be right can she??? Any answers out there???

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Raquel, Home Seller, Paterson, NJ
Wed Dec 10, 2008
wow - I'm stunned. I really don't know what to say. Thank you for all your replies - I've contacted my mortgage company to give me a loan modification - that's still pending. Hopefully they will agree and give us something better - if not we don't know what to do. Thank you all - you've been helpful.
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John G. Sus…, Agent, Paterson, NJ
Wed Dec 10, 2008
Dear Homeowner
Yes the realtor is right. You cashed out all of you profit when you did the refinance. If you sell now the buyers will not pay more then what its worth. Keep the home if you can and wait till the market changes. Good Luck
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Vicky Chrisn…, Agent, Purcellvile, VA
Wed Dec 3, 2008
This is very common in today's market.
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Stephen Maha…, , Valley Stream, NY
Wed Dec 3, 2008
Unfortunately, your Realtor can be very right. It may be in your better interest to get a second or maybe third opinion. Ask them to see the comparisons for the area.
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William Leigh…, , New Jersey
Wed Dec 3, 2008
Raquel: Your Realtor can show you any and ALL the comps (Comparables,) including: available on the market, (competition,) Pending closing and recent sales that apply to your area. At that point, you will know as much as they do about what your place is worth today, except that they may have visited a few of them in the course of business and give you some further insight into condition.

At that point, (again) you will have to make up your mind as to what you wish to do. That will take into account why you want or need to move.

Before you decide that now is not the time to sell, remember that, just as your house is worth less now, so would most replacement homes. A fair trade off may get you better housing for your purposes. The mortgage rates are very good now and will help you by allowing your investment to grow more rapidly, something that may not happen in the future. The future is the great unknown. Even economists disagree and have wildly different forecast of how things will play out.

You can put your house on the market for any price you choose. The agent who told you that she could not put your home on the market was speaking of her own criteria. Other Realtors might put the house on the market for far more than that and hope that either you would lower it later or the market would recover. There is neither law nor custom that restricts what price you can place on your own property. If you go too far overboard, you may not find an agent willing to waste their time. This agent, presumably, has decided that anything beyond $275K is a waste for her. Good for her but perhaps even better for another agent who is more flexible.

Lots of luck
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Kenneth Verb…, Agent, PRINCETON, NJ
Wed Dec 3, 2008
Yes she can be right as pointed out so many times. I suspect your refinance was done based more upon you as a good credit risk than the quality of collateral. This has a lot to do with the mess the mortgage industry is in. (seems pretty amazing that you could owe so much more than you paid when the market was hot). If you want to keep your credit in tact and not lose a bundle now you could try to rent it out and make up the difference between your carrying costs and the rents received. There are a number of tax benefits to holding investment property. Suggest you look at the loss you would incur selling now vs the monthly loss after those tax benefits. If you stand to lose say 5 years or more in carrying costs, I would hold and weather the storm.
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Peter J Roge…, Agent, Mahwah, NJ
Wed Dec 3, 2008
Yesterday I spent woth a customer looking at foreclosures in Paterson. We were on Mill St, Bergen St ,12th Ave and Madison. We saw a goodly number so I know what I am talking about. There are 880 multifamily houses for sale in the town. There are 300 available at selling prices between $200,000 and $300,000 and 200 between $250,000 and $300,000.
I hate to tell you this as the truth always hurts.
Your chances of selling are almost ZERO.
The only ones that are selling are total rehabs that we can pick up for $20,000 or $30,000 or habitable units that we can get at a price where the income gives a return of at least 15% per year.
So if section 8 pays $1200 for each appartment thats a gross of $29,000 a year and at 15% return that makes a cash value of the house at $200,000.
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Diane Glander, Agent, Spring Lake, NJ
Wed Dec 3, 2008
Since the peak of the NJ market in August of 2005, home prices have fallen (on average) over 20% in NJ, bringing us back to 2003 prices.
So, yes, it is possible (and likely) that she is right about your home's value today. As others have stated, get a second and third CMA done for you and take a good look at the comparables the agents are giving you. Overpricing in this market gets you no where.
If you cannot afford to cover the loss, consider staying or calling your bank to renegotiate your mortgage to make it affordable for you.
Good luck.
Web Reference:  http://www.dianeglander.com
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Dallas Texas, Agent, Dallas, TN
Tue Dec 2, 2008
She could be correct however recommend contacting several other agents for their comp'd opinions for your property.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference:  http://www.lynn911.com
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Marc Paolella, Agent, Succasunna, NJ
Tue Dec 2, 2008
Hi Raquel,

Unfortunately true. I have appraised many 2-family homes in Paterson over the past few months, and the values have fallen in spectacular fashion. There are over 600 2-family properties listed for sale in Paterson right now, many of them short sales and foreclosures. That does not count for-sale-by-owners. There are several years of housing inventory and that is resulting in sharply declining prices. I am seeing the same thing in Newark, Elizabeth, and Jersey City. Homes that sold for $400,000-$500,000 are now sitting on the market listed at $260,000, with no buyers. You might have to decide whether it makes sense to keep paying your mortgage. At some point you might have to decide to ride out the storm and stay where you are, or perhaps sell short, or even walk away from the property. Not a fun time right now in real estate...

Web Reference:  http://www.marcpaolella.com
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Bob and Rich…, Agent, Newtown, CT
Tue Dec 2, 2008
Hi Raquel, People who purchased a home in the past few years and have to sell now are finding themselves in the same boat as you. House values have fallen - in some markets more than in others. I would suggest sitting down with the Realtor and going over the comparable sales and market statistics. I wish you luck.
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Renee Porsia, Agent, Newtown, PA
Tue Dec 2, 2008
Hi Raquel,

Wow! I am so sorry to hear about your situation. I must start off by saying that yes, your Realtor can be right. Unfortunately when you purchased 3 years ago, the market was really doing well and you may have purchased your home at at over inflated price which basically means your home may not have been worth what you paid then. That is the story of so many home owners now who purchased when you did.

I would have to ask you if you have to move right now or if you could wait. Your home will appreciate over time. Have you done any improvements to it?

Did your Realtor show you comparables? Is there a lot of competition in your area? There may be a way to create a lot of attention to your home.

If you could provide the answers to the questions, I've asked that would be great.

Renee Porsia
Associate Broker
(215) 669-0589 Direct
(215) 358-1100 Office Ask for Renee
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