What Are My Options?

The rate of foreclosures are up and families are struggling to make ends meet. Some unfortunate homeowners are forced into a horrible situation by no fault of their own. If you have found yourself in this spot there are options available other than foreclosure and bankruptcy.

Short sales are becoming more popular with struggling homeowners and banks. A short sale occurs when a bank agrees to take less for the mortgage than is owned at the time of sale. The sale price is obviously less than the balance on the mortgage note. For example; Mr. & Mrs Smith owe $200,000 on their mortgage, they need to sell the property, however the value of the home has declined and the property is now worth$180,000. The Smith's receive an offer for $175,000. The proceeds from the sale will not cover the first mortgage. The banks, while never preferring this option, will in some cases, agree to a short sale and thus forgive the $25,000 owed to them. This helps the bank in one fashion; their liability is now determined and fixed. Whereas if the bank takes the home through the foreclosure process their costs could be significantly higher.

Real Estate has now moved to the realm of mitigating the loss. Short sales generally have less of a negative impact on the credit score than a foreclosure does. Not all applications for short sales are successful, however, we have found them to be a way out for homeowners and banks -- a win win if you will. If you have questions about a short sale, feel free to contact me or let me know what you think of this blog.

Show Me The Money

The much talked about Stimulus Package that Congress worked on last week has a housing stimulus component to it. In that bill that President Obama is likely to sign tomorrow, there is a $8,000 credit available to first time home buyers. Here is how we think this is going to work out. The credit will be given to the homeowner who meets the following criteria. Any single family residence, that will be used as a single family residence qualifies for the credit. The credit is available to individuals with adjusted gross income of no more than $75,000 or $150,000 for a joint return. The purchaser or their spouse may not have owned a principal residence 3 years prior to this purchase. There is no repayment required of the credit for homes purchased between January 1, 2009 and December 31, 2009. If the home is sold within three (3) years of the purchase the credit must be returned.

So let's give an example of how this will work. If you have not owned a principal residence for the last 3 years and you decide to purchase a home that is $160,000, and you and your spouse make a combined income of less than $150,000 you are eligible for this credit up to $8,000. When you file your taxes and your refund was $1,000.00 you would receive back from the government a check for $9,000.00.

Do you think this is a good idea or a lousy idea? Let me know. I am interested in your feedback.

Lake Country-A slice of Heaven

I was just thinking the other day as I was working with this great horse, that Lake Country and specifically Oconomowoc, are really like a little slice of heaven. I remember when I was growing up as a kid that life seemed to be at a slower pace. We played outside (no video games), we invented things to do. People knew who you were and most things seemed to stay just the same year after year.

Well living in Lake Country is a little different that those 'fond memories' but when you think about it we live in a cool part of the county. There is so much to do out here. If you love horses, like I do, there are so many areas to trail ride with your favorite steed. If you are into biking (road bikes) there are so many back roads that you can ride for miles and miles on back roads or paved trails. If you just love the outdoors you can spend time hiking in one of the many county parks. Lake Country is truly unique and I love living here. The best kept secret though of our area are the people. Most are very friendly and willing to help out a neighbor or complete stranger. Sure there are the occasional self absorbed types who wouldn't lift a finger but they are not the norm. The friendly ones are and that is why Oconomowoc has been home for the past 20 years for our family.