Short Sales: A Viable Option for Distressed Southern New Hampshire Real Estate

I know the words “short sale” may scare you.  But please take just a minute to learn why short sales have become a viable option for your Southern New Hampshire real estate if you’re considering foreclosure.

Once deemed difficult to get, hard to close and rough on the credit score, corrective measures have been taken to improve the valued short sale.  And, the winners are those who understand how short sales work with Southern New Hampshire real estate.

If you are faced with a house underwater and considering foreclosure or a short sale option, please understand the game has changed. 

Short Sales Then and Now

In early 2009, the typical short sale had less than a 50% chance of success.  Banks were skeptical, unprepared and unwilling to accept losses.  No longer!

Thanks to aggressive changes made by the Federal Government, the short sale has become the preferred option for lenders as well as buyers and sellers of distressed property. 

·    The administration has thrown incentives to first mortgage holders, second mortgage holders and new lenders. 
·    Primary lien holders who agree to a short sale can receive as much as $3,000 from the government. 
·    Secondary lien holders, who previously were often asked to step away empty handed, now can receive up to $6,000 for formal releases.

Additionally, there used to be more serious credit devastation for the short sale seller.  In some cases, outright releases were not provided.  The administration has stepped in to protect these distressed sellers.  Today’s short sale has less credit impact on the seller than a foreclosure.

 Now that short sales are a viable option, the market has exploded.  Short sales increased by 4% between November, 2009, and February, 2010.  Activity will only continue to increase.

If you would like to find out whether a short sale could benefit your distressed Southern New Hampshire real estate, give me a call now at 603-821-1134 or email me at Dave@DaveHeeter.com. 

April 5th 2010 – An Important Date for Southern New Hampshire Homes for Sale

April has a lot of important and semi-important dates in it. The tax deadline, Good Friday and Easter are just a few. What is April 5th, though, and what does it have to do with Southern New Hampshire homes for sale? Well, the biggest news is that the government has stepped into real estate and short sales.

While home sales are up nationally and locally, partially due to the Obama administration’s efforts with the first-time buyer’s tax credit, many homebuyers seem to be waiting for a better interest rate or to see if home prices will drop more once the tax credit expires at the end of this month. Meanwhile, owners with Southern New Hampshire homes for sale are preparing for the spring selling season, without any idea whether they’ll actually be able to sell or not.

Part of the reason for this situation is because of the depreciated housing values. For instance, many potential buyers want to take advantage of the repeat buyer’s tax credit, but can’t. They currently own a home that’s facing foreclosure, are trying to sell that home, but can’t because it’s underwater. This is slowing the recovery of the whole market.

The government’s solution is short sales. There’s always been the option for those facing foreclosure to apply for short sale instead, but (thanks, in part, to the many scams out there) few choose this option. The Obama administration has decided that, if they can’t help with foreclosure, they’ll pay people to accept short sale.

As of April 5, 2010, the government is encouraging delinquent borrowers who can’t be helped through loan modification programs to go through a streamlined short sale process. Many potential short sellers have gotten offers the lenders won’t agree to, which this program called HAFA (Home Affordable Foreclosure Alternatives) is geared towards fixing. Here’s how:

·    The servicing bank gets $1,500 for administrative & processing costs.
·    The homeowner gets $3,000 in relocation assistance.
·    The investor is given up to a $2,000 match for allowing a total of up to $6,000 in short sale proceeds to be distributed to junior lien holders (up to 6 percent of the remaining balance of each junior lien).

Even with this program, lenders are wary of short sales. Depending on the price of the short sale, there’s a possibility that lenders could lose a large amount of money. However, under the new program, real estate agents will be working with participating lenders to determine the value of the home and what the minimum price should be. If the short sale offer meets or exceeds that minimum, the lender has to accept it. 

The hope is that this program will slow the tide of foreclosures, free homeowners up to become repeat buyers, sell more homes and, ultimately, improve the flow of the real estate market. The good news about all this is if the program does even a quarter of what the administration plans, there may not be enough Southern New Hampshire homes for sale to go around!

Have questions about the new HAFA program or any other real estate incentive programs?  I’m happy to answer your questions.  Give me a call now at 603-821-1134 or email me at Dave@DaveHeeter.com.

Should You Consider a Short Sale on Your Southern New Hampshire Home?

A short sale happens when a lender agrees to accept less than the balance remaining on a home. It is a way for underwater sellers to avoid foreclosure and sell their Southern New Hampshire homes.

It seems like a good idea for people who owe more on their home than it’s worth, but that doesn’t mean it is right for everyone. Should you consider a short sale on your Southern New Hampshire home?

 Pros to doing a short sale:

·    You will be able to sell your property, get out from under a mortgage you cannot afford and lower your debt.
·    You can still sell your property in a declining real estate market, even if you owe more than the home is worth.
·    Buyers sometimes get good deals on the property or may be able to buy a home at market value in a popular area they couldn't previously afford.
·     While a short sale isn't ideal, it is typically better than a foreclosure which stays on your credit report for 7 years.  (Bankruptcies stay on your credit report for 10 years!)
·    If your home goes into foreclosure and is sold at auction for less than the mortgage, you can still be held responsible for making up the difference.

Cons to doing a short sale:

·     The lender may refuse to do the short sale, or they may still hold you responsible for the remaining debt.
·    The bank’s loss is considered taxable income for you, and you may have to pay taxes on the amount.  (Consulting a tax professional and an atty is probably a smart move.)
·    Short sales do stay on your credit report and may make it difficult for you to a get loan in the future for at least a few years
·    You will have to find a real estate agent willing to put in anywhere from several months to a year's worth of work with no guarantee of income.
·    Short sales take longer to close than traditional home sales and can definitely be frustrating process.

I can help you decide if a short sale on your Southern New Hampshire home is right for you. Call me today at 603-821-1134 or email me at Dave@DaveHeeter.com for more information about your selling options.