BONUS - Mistake #8

ANSWERS: 1) A; 2) 15%; 3) C (but if you answered “A” then you share my sense of humor!)


**BONUS: Mistake Number Eight**

Homeowners Who Are “Upside Down” Don’t Understand All Of Their Options: All kidding aside, this one is pretty serious. If it pertains to you, I regret that you have found yourself in this situation. There are any number of reasons why a homeowner who needs to sell their house quickly could find themselves in a “no equity” or “negative equity” situation. Just having negative equity all by itself is not an immediate problem. Provided the homeowner can “hold on” to the house long enough for the market to rebound, they can usually count on enough appreciation over the years to build enough equity to eventually sell for a profit. However, for a homeowner who “has to sell” (for whatever reason)…having negative equity is a VERY big deal.

Why would someone “have to sell”? Unfortunately, this often results from an inability to keep paying the mortgage payments on time every month. There are many unforeseen or unfortunate circumstances that could cause homeowners to find themselves in this situation, including: Loss of Job/Income; Death in the Family; Separation/Divorce; Military Deployment; Other Overwhelming Expenses (e.g., Medical Bills, Legal Fees, Credit Cards); etc.
Regardless of the reason a homeowner cannot continue to make mortgage payments on time, the simple fact remains that the bank wants their money! They want the full amount, on time, every month, without fail.

If a homeowner “misses” a mortgage payment, does the bank call to remind them? Absolutely! And they’re usually pretty nice about it the first time it happens. They understand that sometimes people just forget to send in the check…or go to the website and pay online. No big deal, they’ll just charge you a late fee as long as you pay by the end of the month. Naturally, the bank wants you to pay on time each month.

But what if you don’t pay at all? And then you don’t pay the next month either? Now the bank starts to take a different tone with you. Banks are in business to lend money, so they really don’t want to have to go through the entire process of foreclosure proceedings (because it’s expensive for them – $40,000 on average!)…but they certainly will if they have to in order to recoup their asset. After several months of not paying the mortgage, the bank will essentially “re-possess” the house. This means they will evict the homeowner and turn around and sell the house…usually for a reduced price.

Foreclosure is an extremely serious topic and beyond the scope of this e-Book. If you are behind on your payments, I STRONGLY urge you to make every effort to get your loan current and/or work out a payment arrangement with the bank. Failing to do this, and failing to even communicate with the bank can have long-lasting and detrimental consequences on your credit and overall financial situation.

Having said all that…if homeowners find themselves in a “pre-foreclosure” situation, there MIGHT be a way for them to walk away from their house with a lessened impact on their credit and finances…and less overall stress as well. It’s called a “short sale.”

A short sale is when the bank agrees to accept less than what is owed on the mortgage. The name “short sale” is deceiving…because there is NOTHING short about the process. They should really call it a “long, complicated, low probability of success sale.” It’s a longshot. Sometimes it works, but most times it doesn’t. There are a handful of us though, who have had considerable success negotiating short sales with banks on behalf of homeowners. So yes, it’s another service that we provide, but explaining how it all works is also outside the scope of this e-Book. All I can say is that if you have found yourself “upside down” in your house, I know you have your hands full right now! If you give us a call we will be glad to review your options with you.

So after all that, are you still thinking about selling…?

If you found this book valuable, we would love to get your feedback on it. Just send us an email to: info@PointProperties.org or give us a call. If you are ready to sell, we can help you further assess your specific situation (for FREE) and help you determine the best strategy to maximize your NET CASH Equity.