Short Sale or Foreclosure, What Should “I” Do?

TV, newspaper, internet wherever you turn you are hearing about this topic everywhere.  Those facing a short sale or foreclosure know it can be very stressful and often wonder where to turn.  I am here to tell you that “YES” it can be stressful, but once you have spoken with a qualified person that can give you direction, answer your questions and help you to make those first steps, this stressful feeling will subside and you will wonder why you waited so long to ask the question.  What most people don’t know right now, if you were to start asking around, you would be surprised at how many people are in the same situation you are in.  Why are we so afraid to talk with each other about our difficulties…remember when the teacher always said to us, the only stupid question is the one that was not asked?  Shouldn’t that apply in this situation also?

The worst thing you could have to tell your spouse or partner is that you may be on the verge of loosing your home.  Now what, how long will the process take, where do we go from here & most impotantly…where will we live & how long with this affect our credit scores.  These are more than just scary thought.  Depending on the action you have to take; short sale vs. foreclosure both will impact your credit scores but in two very different ways.

Short Sale: May stay on your record for 3-4 years.  How it affects your credit score is based on each situation individually as each of our credit scores are different to begin with.  After the appropriate number of years, you may see this come off your credit report.  If you have a second mortgage, this lender has up to 7 years to come after you for the deficient amount owed on that loan even once the home is sold.

Foreclosure: This will stay on your credit report FOREVER! It may affect the terms of any loan or credit card you try to obtain in the future. 

Neither of these procedures should be taken lightly, however, working with a qualified real estate agent will help guide you through the process and be able to direct you to the correct persons that you may need to speak with in order to make the correct decision for you.  When speaking with a Real Estate agent about how you should proceed, it is important to know that this person can not ethically give you any legal or financial advise on the decision you might need to make.  It is always in your best interest to speak with the appropriate persons for direction in these matters.  Your Real Estate agent should also not pressure you to make any impulse decisions on what you want to do.  Since this decision is going to affect you for many years if not a lifetime, take the time to make the decisions that feel best for you, your spouse and most definitely your family.

The other thing to remember is each situation is different and how the bank works with your agent will be different in each case.  So if you see an agent promoting themselves as an experienced or expert in either of these situations, remember that these designations are self-proclaimed and there is NO government or agency that gives these titles to an agent.

THE SPIRITS TO MOVE are here to assist you in all your real estate needs & questions.  Leave us a question if you have one and we will get back with a private response to you.  We are here to help move you in a professional & confidential manner.

When does the Spring Housing Market begin?

Before I got into real estate as a consultant, I to believed the Spring Market for home sales began in May.  Do you know that the Spring Market really begins in late February? Well, it does.  With the holiday season being over & the decorations have been put away, people realized over the past month or so things have changed in their lives or THE SPIRITS TO MOVE just settle in.  Our home maybe too big, too small or we need to be closer (or sometimes even further) away from the rest of the family.  

This thought process & conversation will usually happen over the month of January and then I will get a call that they would like to know what their home is worth.  The situation may also play out something like this, if you are in the Northern part of the country, say like Minnesota, you know that you can be locked up in your home if you’re not a winter lover for what seems like a lifetime, but actually ends up to be about 5 months.  Come February when the Spring Parade of Homes starts, people will go looking at homes just to get out of the house.  Once they start to see some of the new innovations, locations or lay outs they decide they must have a new home.  This means a great opportunity for the person looking to move up and not deal with the stresses of building a home.

So with this said, what to do now?

First, take the time to look around and see if your current home is meeting all your needs.  If you are renting talk to someone or you can even play around on the mortgage calculators found on most mortgage web sites, you will be amazed that in some situations what you are paying in rent you could be paying towards your own home creating a tax break each year & gaining equity on your investment.  NOW THERE’S SOMETHING POSITIVE TO START THE NEW YEAR OFF WITH! 

Second, be sure to talk with a mortgage person to make sure that your credit is in check & that you qualify for a home loan.  Most agents these days will not begin to show you homes until they have the pre-qualification letter from your lender with a maximum dollar amount you can afford.  This is for your own good and well as to manage the agents time as well.

Third, find an agent you like, trust and want to work with.  It seems to me that everyone I know seems to know at least 50 other agents as well.  Whether it be family members, friends, someone at work or a referral from a friend.  Just remember, during this process things can get heated and you need to be able to separate relation ties & be able to get down to business even when the boxing gloves come out.  So be sure that your connection to your agent if it is family or friend is strong enough to withstand a few arguments or disagreements that may happen.  You will also need to feel absolutely comfortable with this person as you will be spending LOTS of time with them whether it is via email, phone or personal contact.  Many agents these days have web sites that can allow you to get a feel for how they work, their background and their mission & goals when working with you.

Have THE SPIRITS TO MOVE touched you yet? If so, now is the time to start getting ready to make the move.  Here’s to happy house hunting in the NEW YEAR.