I want to dispel an urban myth.
No, not the one about alligators in the sewers.
The one I’m talking about is you have to be behind on your duplex payments or in the process of foreclosure in order to sell your property as a short sale.
According to the Distressed Property Institute, there are a number of reasons that cause a property and duplex owner to become a “distressed” property. They are:
- Payment Increase or Mortgage Adjustment- Many property owners who took out interest only or option ARM mortgages between 2005-2007 may experience a jumps in their monthly payments of anywhere from 60 -300 percent in the next year. Actually, these resets are the top reason for distress in today’s market.
- Loss of Job – With a job loss comes the loss of income which contributed to paying the mortgage and bills.
- Business Failure – Like a job loss, people who lose their businesses lose their income, resulting in mortgage payments being missed.
- Damage to Property- No matter how good your insurance is, it often doesn’t cover all of the damage. Not having enough money to fix the property, many homeowners use the insurance settlement to cover living expenses.
- Death of a Spouse – This will not only cause emotional duress to surviving family members, but may also cause the loss of the person who paid the mortgage.
- Death of Family Members- Even if the deceased person didn’t contribute toward the duplex payment, the emotional loss may have ripple effects.
- Severe Illness – The medical bills associated with something like cancer and the time lost on the job can be devastating.
- Inheritance – Doesn’t make sense, does it? But, what if grandma leave you her house– that has a monthly mortgage payment of $5,000?
- Divorce – Imagine the cost of attorneys and two living spaces.
- Separation – Again, separate living spaces when perhaps, both parties were paying the mortgage.
- Relocation – If your employer asks you to transfer, chances are in this job market that you’ll take the opportunity. However, many employers don’t offer compensation for homes or multiple house payments.
- Military Service – While there are some opportunities for relief, extended miliary service can cause financial stress.
- Insurance or Tax Increase – An increase in either of these often results in higher mortgage payments.
- Reduced Income- Many employees have been asked to grant wage concessions in order for their employer’s companies to survive. Those who work on commission may also be suffering reduced income due to the economic slowdown.
- Too Much Debt – An increase in credit card interest rates, or sudden, unexpected expense can result in a duplex payment being too large.
- Incarceration – It’s tough to keep your job when you go to jail. And at prison wages of pennies per hour, it’s tough make a mortgage payment.
If you’re facing any of these challenges, remember there is a solution besides foreclosure. A short sale will likely result in your being able to a much faster financial recovery, as well as keep the permanent black mark of foreclosure off your credit report.
Call me. I’d be glad to help.