Misleading media headlines, complex fines, real estate scams, and hungry agents are luring more homeowners into the trap of holding onto homes longer than they should.
The US housing market may be staging a comeback, but when should a property owner bite the bullet and sell?
On a national level American house prices have been rising by around 10% per year, but this news, and a variety of other factors could be setting up homeowners that have stalled on selling for major financial disaster.
News of rebounding home prices has given many the false sense of security that if they wait a little longer they’ll be able to sell their homes and pocket more money. This may work for some, but many more are in for a very rude and costly awakening.
Distressed homeowners have become paralyzed into inaction, and have failed to take advantage of critical help. Fear of real estate and foreclosure rescue scams have caused them to ignore even legitimate offers of assistance.
Others have been talked into listing their homes way above true market value, which has locked them into agreements with real estate brokerages while their homes rot on the market. In some cases this is due to unrealistic pricing from copying other sellers’ overblown asking prices. In other scenarios hungry Realtors have taken over priced listings just to give homeowners what they wanted to hear, with the hopes of talking them into a major price reduction later.
The problem is that many of these owners don’t realize they are still holding a rapidly depreciating asset that can be a financial time bomb just waiting to destroy their futures.
While national average prices may be going up, many areas are currently experiencing a new surge in foreclosures. This means that home values are going down in some neighborhoods.
Many homeowners also aren’t aware of mounting back property tax debt, special association assessments, and code violation penalties which can hit $1,000 a day. Within months these types of silent saboteurs can add more to debt on a property than it is worth. This goes even beyond any mortgage debt.
It’s unlikely many property owners can catch up on these debt, even if they wanted to. Yet, they must ask who is going to buy a house which has more in outstanding liens than the property is worth. Who is going to pay a fair price for a home, and then tens of thousands in junk fines on top of it?
Failing to act is guaranteed to make matters worse. It prolongs the pain and stress, as well as the point when individuals get to begin a fresh start. Going through the foreclosure process and bankruptcy can mean 10 to 20 years of trying to get back on track. If you are 35 now, that means not starting your do-over in earnest until you are 55! In the meantime the damage can prevent being hired for jobs, receiving promotions, and even being able to rent an apartment.
There is hope, but the sooner homeowners sell and get started the better it is for them.
With so few real estate agents actually having experience with short sales and distressed situations, and the immense time pressure involved, the best way to sell for many US property owners is going to be to find a cash buyer who ready to handle the issues, and is experienced at it. They are out there!