Short pay-off Vs Short sale

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I did receive a phone call from a homeowner who wanted to do a short pay-off – or short pay – instead of a short sale. When I was asking what he thought about a short pay, he hang up saying he doesn’t want to waste my time, probably believing that I had no clue about short pay. Fair enough.

Let’s face it, there is a lot of confusion with short pay and I always want to know what homeowners have in mind about it. A short pay is when you own more to the bank than what your property worth, like in a short sale situation. The difference is the homeowner does not necessary want to sale. And a lot of people believe that they can get a short pay by paying off their balance by dozens of thousands of dollars below what on the mortgage. And it’s not true at all.

As an example, let’s say someone bought a home back in 2006 for $250,000 with 10% down and a mortgage of $225,000. Today, the house worth $100,000 and the balance today is $210,000. If the owner feel that he’s paying too much for today’s value but doesn’t want to sell his home, he can ask the bank for a short pay-off. And people think they can give $100,000 to the bank for the lien’s release. It’s not going to happen. At best, the bank will agree on a 90% pay off on the remaining balance. So you need to have a good $190,000 in this case.

On the other hand, the short sale is when you are on time with your payment but you want to sell your property and it worth only $100,000. It’s when you ask the bank to accept a lower pay off payment.

So there is a big difference between both and lots of people, frustrated by a difficult financial situation, want to believe that a short pay is as acceptable by the bank as a short sale.

Also, you might find difficult to find the help of a Real Estate agent since there is no sale in a short pay-off and therefore, no commission for the agent. And there is very few people, if any, willing to work for free, especially for a time consuming short pay-off.

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Comments (0) Oct 30 2011

Are you looking to buy a property in Cape Coral, Florida?

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So, you have been looking to buy a home in Cape Coral for over 6 months now. There is something important for you to know.  Stop looking to buy a home right now.  You are wasting your time and energy. Cape Coral properties prices have been increasing for the last 6 months in a row. So, if you’re still looking, it’s not for finding the best deal of the century, it’s already too late. It has to be because you’re searching for the best floor plan or curb appeal possible, but then, the inventory is so wide, if you didn’t find it already, it’s because it doesn’t exist.

Not to mention all the time that is being wasted by professional lending and real estate brokers. They are not your taxi driver even if it’s my second job. They are not the ones to fix your poor credit scores.  They are not the ones to hold your hand every step of the way even if I do it on a daily basis.  They are there to help you not be taken advantage of by someone who is not committed to the home buying process.

Buying a home is a process and it doesn’t take over 6 months to complete.  A Realtor can help you with the home buying process, however, you the buyer must take action to make it become a reality.  Seeing every home that comes on the market for a year is insane!  It’s not that big of a deal to find the house you will come to know as home.  If you see a house you like and it’s within your means, then buy it.  Otherwise, go home and leave everyone alone.

You can read more at 1capecoral.com or in my blog. The time to buy a home was in the last 6 month, with a rock bottom price reached last December 2010/January 2011  or today…not in 6 months. Quit trying to out think the other guy or the sellers. Find what you like and buy it.  If there isn’t anything out there that you like then you probably are not going to find it.

Go home.  Stop wasting your time. Watch some football or NASCAR or a movie anything but get out of the home buying process as you are not a buyer.  You are a looker and you are frustrating people around you that can actually and willingly help you.

The time is ripe to buy a home today.  Interest rates are low.  Prices are still low. In most markets inventory is high.  Sellers want to negotiate on their homes. It’s easy and time for action. And if you think that a home priced below a car’s price is too high, you’ll never buy anything. So, do something else.

If you are angry right now…good.  Here is a way which may help.  Revisit why you wanted to buy a home in the first place and re-motivate or inspire yourself.  If that doesn’t work then forget about it.  You will never achieve your American Dream without concise methodical action on your part.  Now go out there and become a buyer and call me to seriously get started!

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Comments (0) Oct 25 2011

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