Do You Owe More Than Your Home Is Worth?

If your answer to the question in the title of this article is yes, do not feel alone. There are many home owners in the Scottsdale area, and even the entire world, that can answer yes to that question. There was a period a few years ago where we can say that most people were, shall we say, greedy. The home prices were on the rise, especially in the western part of the United States. There were more home buyers, than there were homes to buy. That is just your typical supply vs. demand situation. When you have a supply vs. demand shortage, what ever is in short supply increases in price.

There is really no problem with home prices, or anything becoming more expensive, due to a supply shortage. In most cases, when the prices rise, some people will pay the higher price, and some will not. Eventually, there will be a point where people will stop paying for the higher price, and then there will be more supply than there is demand.

The housing market, usually works the same way, but the last time, around 2004-2008, when the prices rose due to high demand, the demand was not only from consumers who wanted a home to live in. There was a large group of unseasoned, inexperienced speculators, that were putting a high demand on the housing market. There are some people that will say the rise was due to investors, buying up all the property, and they would be wrong.

Real estate investors, in the true sense of the word, were not buying any property during the last market increase. Real estate investors, are people that buy property at a low price, hold that property, rent the property out, have a positive cash flow on the property, and only are really interested in acquiring more property. A real estate speculator, on the other hand, is a person that purchases a property at one price, and holds or improves that property, with the sole purpose of selling that property in the not to distant future, at a profit.

There is really nothing wrong with a balanced mix, of investors, speculators, and consumers. The reason the market crashed, and that we are in the present situation, is due to greed. There were many people that became real estate speculators, basically overnight, that thought they would make a quick fortune, and live life happy ever after.

There were normal people that had bought a home, and had a career, at whatever their given profession was, that took out equity in their home, and joined the feeding frenzy, of new real estate speculators. These new speculators were not the only ones to blame for the problem. There were also lenders that could see a new increase in their bottom line, by providing a loan to anyone that asked, or that they could convince , that it was a great idea. The banks were also to blame, and the investors, that were lending the money, as they were providing interest only, stated income loans, to anyone basically with a heart beat.

The entire process might have actually played out differently, had the media not been involved the way that they usually are, reporting what they think, and not reporting the news. If the media were only reporting the news, they would have been simply stating that home prices were on the rise, how many homes were being sold, and the prices of those homes. They would have been reporting that there were more jobs, and that the economy was booming.

The news media reported all the news, and what they felt would happen, which was that the market would crash, as there was a false housing bubble, and that it would never last. When we are told often enough that something is going to happen, good or bad, eventually it will happen, simply just because we believe that it will. That is what happened to the housing market. It is like playing musical chairs, when the music stops, and there are more people than there are chairs, someone is left standing.

There is really nothing bad about owing more on your home than it is worth, unless you need to sell. Eventually, given enough time, the home prices will be higher than they were at the high of the market. It will take some time, but eventually it will happen. If you need to sell your home, due to a loss in income, or job transfer, or death in the family, or many other reasons, and you owe more than it is worth, than you too have alternatives.

Short sale, is the term used for selling a home when you owe more than it is worth, and that is the best alternative that you have, if you need to sell. You could let the house go into foreclosure, or give the home back to the bank, in the form of a deed in lieu of foreclosure, and they would have a more negative impact, for a longer time, than a short sale.

If you would like to get help, we are here to answer any questions that you may have about short sales. We are very experienced at doing short sales, and we have helped many home owners to sell their homes, and find a new place to live. If you would like to read more information on short sales, you can visit this website, . We just want you to know that there is no reason to panic, we understand that nobody wants to be in a situation where they are going to loose their home. We are here to help you, and all you need to do is email us or give us a call.

We know that the market will recover, and that we, as a society, will also get through this, and that life, will again be great for the majority of us. Until that time comes, we need only to keep a smile on our faces, and work to do the best that we can, given whatever situation we find ourselves in, and always trust in God.