About Short Sales

Hawaii has always been known as a tropical island paradise, a dream vacation, with it’s perfect weather, white, sandy beaches and warm, loving people. But what about our real estate market? As those of us who live here know, the late 80′s were an interesting time. Suitcases of money, hand-delivered by Japanese business men, smelling deals.

All of a sudden, all that glitters was gold in Hawaii…..Homes were purchased as regularly as sipping water. Loans were made to anyone who could fog a mirror. Home owners were stripping the equity out of their homes just for the heck of it and spending it on fruitless items and activities.

Much like the waves that coming crashing on our shore, so did our real estate market. Now the tide is sucking back out to sea. Home owners are baffled on how to sell their property in this economy. People that actually want to buy Hawaii property can barely qualify to get a standard loan, if at all. Most Hawaii home owners owe more on their mortgage than their property is worth, or at least, have no equity left in their property in this market.

The real question is, what is the best way to sell our Hawaii house in the current market, with a Realtor right? The answer is usually NO. 99% of Hawaii Realtors lack the creativity to get the job done right. Most are one dimensional thinkers and are not interested in the home owners best interest. Most just list a property and continue to tell the home owner to keep dropping the price hoping it sells.

Several Hawaii home owners actually are over leveraged. This means, they owe more on their mortgage than the house is currently worth in our market. The only way to sell a property in this situation is to pay the mortgage company extra money just to sell the house to a new buyer at an already discounted price. Stupid, right?

In this economy, even the banks, as we have seen in the news, are feeling the effects of the recession. Since several Hawaii home owners are in difficult situations, they are asking the banks to accept a short sale. This is where the bank will take a payoff of less than what is currently owed on the mortgage.

If no offer comes in on their property and the home owner has only one loan in place, they may wish to consider a deed in lieu of foreclosure. Be warned that both of these exit strategies will affect their personal credit to a degree. Also, they will need to consult with a professional that has at least 7-10 years experience in this field rather than some wanna-be investor hoping to make a quick buck.

There is no better exit strategy for Hawaii home owners right now that to offer owner financing to new buyers. Again, you will want to consult a local Hawaii professional, that has experience with this, so that you do it right the first time and avoid legal issues down the road.

For example, a mortgage take over program might be an option. This is where a new buyer can come in and actually begin making the monthly mortgage payments. This would immediately alleviate the pressure from the home owner and slide a new buyer into the property at the same time, thus creating a win-win situation. Again, please consult a professional company like IBuyHousesHawaii.com before making any decisions.

All of America, including our Aloha State has been rocked by the current economy. If you need to sell your property and you do not want to wait 6-months to get it done by repeatedly dropping the sales price. In many situations using a Realtor is counter productive to actually selling the house and will get the home owner in more financial difficulty than before. This actually happened to me with a large national company with offices here in Hawaii. Never again.

Whenever you read a general article about mortgages the term foreclosure is oftentimes accompanying it. Millions all over our great country are unemployed and struggling. Many American households are being destroyed because of foreclosures on mortgages. The ongoing word is this mortgage crisis is predicted to get a lot worse before we begin to see any light at the end of the tunnel.

Webster states that mortgage is the pledging of your property to a creditor as security of a debt.Which can also be taken as, you apply for a loan through a bank, receive that loan to buy your property and have to pay funds back to the bank. With having to pay back to the bank, there are legal litigations that have to be filed. The litigations state that if you default for a consecutive period of time the bank can then take ownership over your property. There are a few things we can do to cease the foreclosure on our own property. We can choose to refinance, apply for a reverse mortgage, or a loan modification.

Refinancing a mortgage means paying off your own mortgage and signing a loan for a new one. Millions of people refinance their property aspiring to get a lower yearly interest rate. When considering refinancing your property read all fine print with your contract and try to obtain a rate between 2-4%. This sounds pretty crazy, how an interest rate can make so much of a difference. In the long run you will save more money on interest and be applying more to your principal.

A reverse mortgage is beneficial to senior citizens. If you are 62 or older, own your home, have a low mortgage, and reside in your dwelling. Reverse mortgage may be the answer to your prayers! A reverse mortgage allows you to transform a bit of your equity into cash and pay off your existing mortgage. And, you simply do not need to repay until the home is not occupied by the owner or they die. Money from the reverse mortgage is considered tax free and is considered income. The only downside to reverse mortgage is the debt on home increases, equity diminishes, and the upfront costs and expenses can be pretty expensive.

A new trend in helping to solve the foreclosure dilemma is loan modifications. Loan modifications enable you to find an affordable mortgage payment for your situation. This saves people time and money comparative to refinancing. With a loan modification instead of looking for a new loan you’re simply modifying your existing loan. To be considered for a loan modification you need documented proof of a financial hardship you are facing. You would have to be behind 3 payments, and have not filed bankruptcy. The terms are pretty straight forward and you should have no problems obtaining this form of mortgage.

The economy is in shambles right now, and every American can clearly see that. But, we shouldn’t let this economy be our downfall as well. Stop the world from taking from you what’s rightfully yours, and explore all options with an open mind. The welfare of yourself and your family is at risk.