Patience In The Short Sale Procedure
We wanted to discuss the interesting market that we are in yet again today. Essentially, we would like to talk to you about a recent phone call that we had with a client. The client was wondering if it was better to wait it out. Because she is relocating to a different state, she thought that she could possibly rent the home for the next couple years and then sell the property in the future.
We are not in the business of telling our customers what to do, especially when it comes to their mortgage. Yet, it is our job to educate the customer as to the decisions that she can make. The conclusion that we came to was as follows.
Because she is not in a bad mortgage payment situation based on what she could receive for rent, she would only get about $200 in deficit per month. She could simply write that loss off as depreciation. However, the key is, if she was merely behind by $20,000, it could be a solid decision for her.
Looking at the data from a business standpoint, what it would take for her to rent and then sell in a few years makes no sense. The client is $100,000 behind in equity. The house is in an out-of-the-way area of Phoenix, giving her a prospective for more depreciation. Each time that she is negative on the rent to mortgage payment, she would be tacking on added mortgage to her loan remainder. Over twelve months, she is going to be $2400 in the negative each year. Compound that on seven years and she will have a lengthy wait to recoup the equity in her home. That is given the best case scenario.
As a result, is it in her best interest to wait it out? After we gave her a clear image of how long it will take to recover that $100,000 her only alternative is short sale. She has attempted the loan modification, but it did not work for her circumstances.
Since the bank is not willing to decrease the principal. So the next best thing for her to do is the short sale. These are genuine situations that occur every day. As a short sale agent, it is my duty to help you recognize the situation and ramifications of your decisions.
Get more help from short sale Realtor, Steve Horn, at Homes by the Horn presented by the Steve Horn Team, Short Sale Specialists of Arizona
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