Short Sales :: Foreclosure Homes Kansas City

Short Sales

Short Sale is a term for selling a home and netting less than what it costs to pay back your mortgage, your closing costs and your real estate fees. Maybe you purchased the home with a 100% or 103% loan that allowed you to put little or nothing down. Or maybe you put 10% down in a neighborhood that has deteriorated to the point where your Loan To Value (LTV) is not 90% anymore but now 100% … or worse.

Simply put: You owe more on the house than it’s worth.

If you find yourself underwater here in the Kansas City area, it doesn’t matter how you got there. What matters is how to we solve the problem.

Quick History
During the real estate boom of the 2000′s many, many people either bought homes with little or nothing down or refinanced to the point where there was little equity left. People thought of homes as a never ending appreciable commodity. And while real estate does tend to trend up over the years it is susceptible to the fluctuations of supply and demand.

Now we have too much supply and not enough demand. Houses that were purchased with thin equity positions garnered even worse equity positions as neighborhoods trended lower in values. In some parts of the country it was as much as 25% or 40%. Heck, even in the Kansas City area there are areas with huge declines.

But Johnson County, Kansas has weathered pretty well. Unless of course, you only had 3% – 10% equity going in and the neighborhood declined by 5% then you lost your job and had to take a lower paying job (or two) to make ends meet but still found you can’t keep up with the mortgage that seemed so affordable a few short years ago.

The Selling Your House Problem
Let’s take the scenario just mentioned. You have a home in Overland Park, Kansas. You put 5% down in 2007 and things were humming along. Then the recession hit. You lost your job making $55,000 per year and replaced it with a job making $40,000. That’s a huge difference. To make matters worse your neighborhood had several people in the same situation and they couldn’t hang on quite as long as you and their homes already fell in to foreclosure.

Foreclosures lower property values for everyone. Period. Two or three homes in your neighborhood selling for 15% less than the rest of the “rack rate” homes drives the price down. Maybe 2%. Maybe 5%. Heck, maybe even as much as 10% in OP.

So let’s do some math. You only had a 5% in the home and you now have lost that. The house needs more repairs (roof, wood rot, etc) that you simply cannot afford at your reduced earnings and on top of that closing costs and a realtor are going to cost you another 5% to 8%. (Real estate commissions are not set and are always negotiable.)

You’ve already spent all your savings to stay afloat to this point so there is no way you can bring money to the table. What can you do?

You Do Have Options
This web page can help you with your options. We are professional realtors and can give you guidance and counsel as to what you should do. You can seek a loan modification. You don’t need our help for that. You can contact your mortgage company.

You can ask to do a deed-in-lieu of foreclosure where you simply turn your keys over to the mortgage company and walk away. (Banks are interested in these as a next-to-last resort only in most cases.)

Or you can try to “short sale” your house.

Short Sale
In a short sale, the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage.

That’s a direct quote from the government’s website on the matter: http://makinghomeaffordable.gov/hafa.html

We Can Help
Under our Short Sales tab at the top of this web page you will find several different pages for home sellers under financial duress, home buyers looking to purchase a bit under our current real estate market and information about the HAFA (Home Affordable Foreclosure Alternatives Program).

We are a staff of trained, professional real estate agents who live, work and raise children here in Olathe and Overland Park, Kansas. We know Johnson County. We know what your home is worth and how to best walk you through the short sale process whether you are a buyer or seller. Let us help.