Kristy Stavrou: A few years ago, we were all receiving offers on our homes that were significantly higher than we had it listed for. and it was all very exiting. Unfortunately, those days are not here anymore. Marco Umana: The biggest issue we are seeing right now is a lot of houses are under, the value of the house is less of what people own the house. In other words, if your house you bought it for $300,000 and now it might be worth $275,000. So the issue will be what to do with that $25,000.
Well, your choices are very simple. One is either have the buyer agreed to pay the difference or you have to come to the table to close in, when you sell the house with the difference. You don't have it and what do you do? Peter Kalian: Many people are trying to sell their homes as a short sale. Now what a short sale is, is that you sell your property for less than what's owing to the bank.
Pamela Jones: For that, you need the banks permission and it can be a long difficult process.
Kristy Stavrou: I have heard stories 6 months, 7 months, 8 months just to hear no from the bank. So you may be thinking, you are moving and no one has given final approval on this.
Dennis Bruce: More than 80% of the time, short sales are not approved. There is not a lot of incentives for the short sales to get approved because the second trust holder gets taken out, they don't get paid. In many cases, they have insurance to cover their loss, if the house goes to foreclosure, but if its sold short, they don't see anything.
So if you homes with there are two trusts and the two trust holders are different people, different lenders, the odds of a short sale are pretty much non-existent. In many cases, it starts some down the road to foreclosure because they stop making their payments in hopes of getting approved.
Peter Kalian: Even if a short sale is approved, the amount of loss taken by the bank maybe considered a gain to you, the seller, and you may have to pay taxes on that amount. Dennis Bruce: So the short sales, they are not settled, they are very disappointing. They induce a whole lot of stress and its not good for anybody. Marco Umana: We see a lot of people also disdained walking away from their house and they just say, Here are the keys, goodbye. Well, that has even more implications at the short sale because on your credit report its going to show a foreclosed property. The one thing that I will do right now, if I am upside down, is contact the bank. In many scenarios, they are more then willing to work with you and try to make it an affordable payment for you. So in that way they avoid this short sale, they avoid the foreclosure and the people can keep their home. wouldnt say this is a bad time to sell. It all depends where your personal possession is on that house.
Dennis Bruce: The benefit of selling today is that as long as you can do it, you have tremendous benefits on the buyer side today. There is a huge pool of prospects for your home today to buy it because the interest rates are very attractive. To watch the other segments in this video series or for How To videos on almost any other topic, visit www.