Every time a bank makes a home loan, it creates a positive domino effect within local economies.\u00a0 Builders, architects, roofers, plumbers, furniture retailers and other companies reap the benefits as homebuyers spend their dollars.\u00a0 But today, these new home loans are no longer happening at the rate they should be.\u00a0 Homeowners are generally staying put and many owe more on their homes than they are worth.\u00a0 When they need or want to move, they\u2019re finding they would have to bring thousands of dollars in cash to the closing.\u00a0 Most cannot afford it, so they continue to wait out the economy and hope home values will eventually recover.<\/p>\n
Economists predicting home values will not return to their pre-2007 levels anytime in the next decade.\u00a0 That\u2019s a long time to wait.\u00a0 This stagnation in new home loans and home-related transactions negatively impacts the economy.\u00a0 Homes need to be revalued at more appropriate levels so that families can move now and new homes can be built.<\/p>\n
The value of a home drops by 1 percent, on average, if it is within 250 feet of a foreclosed home.\u00a0 This happens for multiple reasons.\u00a0 If you live near a foreclosed home, it may not be maintained and diminishes the appearance of the neighborhood reducing real estate value.\u00a0 Secondly, even without visible deterioration, such homes, when sold quickly for a discount, can affect neighborhood values because homebuyers and real estate brokers look at comparable sales when making an offer or listing a home.<\/p>\n
The best way to get home revalued appropriately and back on the market is if upside-down homeowners understand the value of negotiating a short sale.\u00a0 A short sale occurs when the lender agrees to the sale of a home for an amount less than the outstanding mortgage balance.\u00a0 The sale is short of the payoff.<\/p>\n
The lender\u2019s approval is required because it has a lien on the property that must be released to allow for the transfer to the buyer.<\/p>\n
In a regular sale, the mortgage would be paid in full and the lien would be released, but in a short sale, there isn\u2019t enough money to pay off the mortgage, therefore approval from the lender must be received in order to release the lien short of the full payoff.\u00a0 Legal counsel can advise homeowners on their liability for the difference between the payoff and negotiated amount, as well as credit and tax consequences.<\/p>\n
Short sales benefit the economy because they help maintain home values as high as possible.\u00a0 They also free homeowners to make buying and selling decisions for their individual circumstances.<\/p>\n
The overall impact is that homeowners who do short sales are incrementally increasing activity in new-home building and loans, helping to revalue area homes, and keeping money local and not on Wall Street.<\/p>\n
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Every time a bank makes a home loan, it creates a positive domino effect within local economies.\u00a0 Builders, architects, roofers, plumbers, furniture retailers and other companies reap the benefits as homebuyers spend their dollars.\u00a0 But today, these new home loans … Continue reading