Foreclosure Alternatives
Maybe it’s because of Twitter or LinkedIn, or maybe because we reach such a large audience here on the Fort Lauderdale Real Estate Blog…but lately I’ve been getting a lot of interest and requests from people in the industry to post their articles as guest authors. Most of the people just don’t have the credibility and degree of success that warrants me introducing them to our readership.
However, when a guy comes along who sells hundreds of homes per year (including 90 homes in under a week!) and generates over $100 Million dollars in sales and has been an award winning Realtor for nearly 25 years, then I think he’s got something to say, and I want to hear it. I think you will too.
Property owners should consider alternatives before draining savings
If a short sale inevitable then decide sooner verses later
In the olden days, both buyers and sellers left the closing table with smiles and a warm feeling about the decision they just made. However, for the better part of this decade, there have been about fifty percent fewer smiles exchanged during this once happy occasion.
Back when property values were climbing faster than Miley Cyrus’ empire, buyers may have shared a polite grin at closing, but they weren’t happy with the fact that they had to outbid thirty other buyers and pay a premium price to be even be at the closing table. Buyers are sharing some big-time smiles today. The sellers sit across the table, sharing only a box of tissues.
It may be a good time to buy stock in Kleenex because more tears are going to be shed as an increasing number of property owners realize that their savings won’t be around long enough to see the market recover. On a daily basis, property owners with no equity and even less hope, meet with their real estate agent, searching for a solution that they already know doesn’t exit.
Before you classify these people as deadbeats, realize that these homeowners are not the ones that decided to buy a couple of pre-construction homes instead of buying lottery tickets. These are the people who may only own the home they live in. They are the ones we do business with, the ones who probably live across the street from us, the ones who have (or had) good jobs, the ones who believe in paying their bills on time and maybe, the one we see in the mirror each morning.
For the last several years, these people have pulled their kids from private schools, sold their wave runners, developed a taste for baloney sandwiches and drained their savings account in order to honor their mortgage commitments. They believe in paying their bills and they take pride in having good credit, but now they realize that they are faced with a difficult decision. Do they sacrifice their family’s financial security in order to maintain a clear conscience and good credit score? They can’t afford to keep the property and they owe more than the property’s worth, so they can’t afford to sell it either. To say they were between a rock and a hard place would paint too optimistic a picture.
The essence of their decision is, do they stop paying their mortgage while they still have some money in the bank or do they wait until their savings are exhausted? In spite of adjusting their living and spending habits, they still have more money going out than they have coming in. There’s a name for this condition and it’s called going broke. Lenders, trying to show their sensitive, caring side, use the term “monthly shortfall,” which is a politically correct way of saying the same thing.
My advice to anyone who has a monthly shortfall and owns real estate is to seriously evaluate your financial position to determine how long your savings can support your mortgage obligations. The adage of having six months of emergency reserves is as outdated as leisure suits and white belts. For most property owners, it will take years, not months for real estate prices to increase enough to make selling an option. So, unless there is a way to increase income or further reduce debts, you will be wondering where that the whistling sound is coming from.
Let me solve that mystery for you. What you are hearing is the rushing wind as you freefall further in the financial hole each month. Many have already maxed out their credit cards, trying to stay current with their mortgage payments. Others are already dipping into their retirement funds. Neither action will slow the fall; it will only delay the thud.
I am not encouraging anyone to walk away from their mortgage obligations or fail to pay their other creditors. For those who have a monthly shortfall, that outcome is already guaranteed because you can only fall until you hit the ground. I am suggesting that if that outcome is inevitable, then you should address it before you drain your savings.
To slow your fall, you can ask for a loan modification from your lender or take the short sale route. The foreclosure option is available for those that enjoy freefalling, but you know what they say about the sudden stop. Since getting back in the plane isn’t an option, the best you can hope for is a controlled crash landing. You and your credit will be bruised, but at least you will fly another day.
Keep the Faith!
Denny Grimes, president Denny Grimes & Company Inc., is entering his 26th year serving residential real estate clients in Lee County. He acts as a real estate instructor across the country and is recognized as one of the top agents in the nation. Denny holds an MBA in marketing from the University of South Florida and has earned many prestigious awards for marketing his business. Denny Grimes and Company, ranks among the top three Realtors/Realtor groups in a county with more than 10,000 licensed real estate agents. Last year the team was responsible for almost $80 million in sales, which amounts to approximately 250 buyers and sellers that have met the goal of buying or selling a home.The leader of this successful team, Denny holds a BA and MBA from the University of South Florida. His has earned the Graduate Realtor Institute (GRI) designation, obtained by only seven percent of Realtors, and he is a Certified Residential Specialist, a level achieved by only two percent of Realtors. Denny is a Certified General Contractor, Certified New Home Sales Professional (CSP) and Accredited BuyersRepresentative (ABR). He has received many awards during his career, including but not limited to the Sales Excellence Award, which he received every year since 1983; numerous Pinnacle Awards for top new home sales in Lee County; the Excel Award for Top New Home Agent in the state of Florida; and the National Sales and Management Award for the Top Home Agent in the Southeastern United States.
In addition to his award-winning and highly successful real estate career, Denny is a popular seminar speaker and trainer. A long time resident of Fort Myers, Florida, he is a family man and active in the community.
Denny Grimes
Denny Grimes and Company, Inc.
1870 Clayton Court
Fort Myers, Florida 33907
Phone:: 239-689-7600
Toll Free:: 866-466-3822
Fax: 239-689-7601
Email: Denny@DennyGrimes.com
Comments
Got something to say?