This is a question that a lot of homeowners are faced with these days. Since the downturn of the economy, many homeowners have lost jobs, been transferred, had a neighborhood go bad, or simply have a home that is worth much less now than when they bought it.

But, there are more options available to you than you think…

Let’s get the two most misunderstood methods of getting rid of a house out of the way first! The dreaded Short Sale and Foreclosure.

The Short Sale

A short sale is a sale of a home where the proceeds come up short of the loan balance. So, if you owe $100,000 on your mortgage loan, and the house is worth $50,000, the bank may approve the sale and work out the difference with you. Many times, the homeowner pays a fraction of the difference. You might offer to pay $5000 to wipe out the $50,000 shortfall. This shortfall will be reported to the credit reporting agencies, and this will injure your credit for roughly 3-5 years.

Why would a bank do this? Well, the banks have started to realize (finally) that a short sale is better than a foreclosure. The overall cost to the bank is far less when they allow a short sale.

You may accomplish a short sale even if your loan is current, although the majority of short sales are taking place on houses in default.

A short sale might be something to consider if you must sell. The “guesstimates” are that it will be at least 3-5 years before we see any meaningful appreciation in home prices. Therefore, if you are upside down on your house more than $50,000 it may be a long, long time until you can sell the house for it’s loan value.

If you are considering a short sale, it would be wise to consult a few attorney’s to discuss your particular situation. Find the one with the most short sale experience, the best references, and make sure to ask a LOT of questions.

The Foreclosure

The foreclosure is a different animal entirely. This is a situation where the loan is in default and the bank is effectively repossessing the house. The bank may find upon foreclosure that the inside of the house is trashed.The loan is considered “accelerated” when you are in default for a certain period of time. That is, the loan is due, payable all at once. The bank will demand payment, then begin a proceeding in a court of law to have the ownership of the house transferred back to the bank. As you might imagine, this gets expensive for the bank very quickly. It also gets many homeowners angry, which can lead to destruction of the property. The bank may find upon foreclosure that the inside of the house is trashed. Banks are not in the real estate business, they are in the money business and these added repairs add headaches and costs that the banks cannot handle.

For the homeowner, the foreclosure can be particularly painful. Once the house is foreclosed upon, you will obviously have to move, but does this put the problem behind you? In many cases… No. The bank has recourse to come after you for the balance of the loan, and in many cases they will, or will they will sell they debt and you will have a bill collector chasing you for the money. In some cases, they may be able to even garnish your wages. One way out of this mess is declaring bankruptcy…. another terrible decision that someone has to make.

After the foreclosure process is complete, this will also be reported to the credit reporting agencies. This will damage your credit very severely for 7-10 years. It will be a difficult road to make things work after a foreclosure. This would be considered an option of LAST RESORT and you absolutely must get an attorney to help you through this. Many times an experienced attorney can smooth the road appreciably.

Stay in the Home

Obviously, there is the option to stay in the home until things improve. Another difficult decision, as no one can predict what the future holds…

Is that it? Three choices! None of which are very helpful…

No, there are more options than you think! Keep reading!

What if I said you might be able to sell your house, have your move paid for, and keep your credit score intact?

Too good to be true? Maybe not.

Enter the educated Real Estate Investor!

We’ll call him Bob.

Bob can understand your situation. He sees different types of situations all the time. The good thing is: He also knows how to make things a lot better. He has options that you most likely didn’t even know about. Depending on the situation, Bob may make your loan payments for you, may help you with moving expenses, and let you leave when it works best for you. Why would Bob do all this?

Quite simply, he makes money on it. As an educated and field trained Real Estate Investor, Bob sees beyond the usual way real estate is  bought and sold. He can look at the issues from many different angles, and as such can often find a way to help you out that makes him some money as well. I don’t want to get too bogged down in the technical, but just know that your challenge can easily become a win/win situation. He gets a property for long term growth of his business, and you get to move on with your life knowing that your credit is intact, your challenge is solved, and this problem is behind you.

The way this works is, Bob will spend time with you learning about your particular situation. When he has a full understanding of your current challenges he will get to work creating a solution. Bob will usually present to you three offers so you can choose the one that best suits your needs. Many, many things are possible. His business is really all about creating solutions that work for everyone.

That all sounds good but where do I find Bob?

 There are investors in every state. There are good and there are not so good, so it’s up to you to decide which one is best for you. If what you are hearing sounds too good to be true, ask more questions. Ask for references. Ask them how many times they have done this! If you don’t get the answers you like, find another investor.

Once you are comfortable with the process, a few pieces of paper need autographs and that’s it. No fees. No real estate commissions and no hassle. Your challenge is put behind you.

More information is available, if you are interested…

Are you still asking yourself if you should see your house? Well, you can speak to a trained, experienced, Real Estate Investor here anytime. They work in all price ranges, buy houses in any condition, and do not charge you a fee of any kind.

Please leave a comment and let us know what you think!