Twin Cities Real Estate News

In a recent survey it was shown that Certified Distressed Property Experts across the nation are providing extraordinary results that are giving homeowners hope with respect to the sale of their home when they’re forced to complete a short sale

In the absence of an effective Loan Modification – where the payments and/or principal balance of a homeowner’s mortgage are adjusted downward – owners are being forced to leave their homes by the thousands here locally and by the millions nationally due to borrowers inability to make the payments!

Sales of vacation homes dropped nearly 31 percent last year, while investment-home sales fell just over 17 percent according to the 2009 National Association of Realtors Investment and Vacation Home Buyers Survey. While the market was down in all segments, these two categories fell by a greater amount than the sales of primary residences, which fell by just over 13 percent.

A Short Sale results when the homeowner sells their property, the net proceeds are insufficient to payoff the mortgage balance, yet the mortgage company agrees to accept less than the mortgage payoff amount in order to close the sale. All Short Sales are subject to mortgage company approval and require an extensive amount of work to reach a successful outcome.

The latest Obama plan designed to help homeowners stay in their homes by modifying their mortgages and avoiding foreclosure has made some progress over the past two months. The program is called “Making Home Affordable” and has a price tag of $75 billion.

Numerous homeowners are finding it difficult to afford their house payments today for any number of reasons. Some are faced with job losses, others with medical emergencies and many are simply affected by the economic downturn of the global recession. The financial strain is being felt by just about everyone in society.

What is a Certified Distressed Property Expert (CDPE)? This is not only a designation earned by a licensed Realtor, but it is also an acronym that signals to the public that the person displaying it has gone through extensive training to assist property owners who are in distress; with the goal of helping families avoid foreclosure.

Price and value are not the same when buying real estate. Price is simply a figure; a number; an amount that a given buyer wishes to pay or can afford. Value on the other hand is relative and possibly subjective, but one that generally represents “a lot (of house) for the money”. A buyer purchasing a property for tens of thousands of dollars below the listed price may feel good about the purchase, but may not have received as good a value as a buyer paying the listed price on a property that was priced below market.

If the value of a property – less the costs of selling the property – falls below what the homeowner owes the mortgage company, the property is said to be “short”. If the homeowner wishes to sell, but does not have the cash to cover this shortage at closing, then the property could still close providing the mortgage company, or companies, are willing to negotiate a “Short Sale”.

Real estate values in our area and across the nation have taken a beating. This downward price pressure, along with a variety of economic factors, is putting extreme financial pressure on homeowners. Nationally, nearly half of all homes with mortgages currently have a market value that is LESS than what is owed on the mortgage! As a result, when a homeowner wants or needs to sell their home, it is oftentimes economically impossible to do so, as very few sellers today are in a financial position to bring thousands of dollars to closing.

Jeff Scislow, CRS
RE/MAX Results
PO Box 240195
Apple Valley, MN 55124
(952) 431-3900
jeff@scislow.com