COST OF NEGATIVE EQUITY IN REAL ESTATE

By
Real Estate Agent with Precision Real Estate Inc. SA535849000

COST OF NEGATIVE EQUITY IN REAL ESTATE 

We have 11 million American households underwater when it comes to what they owe on their mortgage vs. the value of the home. Many people are walking away from their home because they become frustrated with the whole system and just want it to be over. So, they take matters into their own hands. Statistics show us 7 out of 10 homeowners who have faced foreclosed did not contact a professional Realtor to assist them. The Real Estate and Beyond Teamhas create a web site dedicated to assist people who wish to learn more about their options before being foreclosed upon by the bank.

www.ArizonaShortSaleAndBeyond.com

Have you ever thought what it is costing someone to have negative equity in their home? When considering a short sale many homeowners overlook the very expensive cost of carrying negative equity over a long term. What many people don't take into consideration is that at the national average appreciation rate of 6%, it can take homeowners several years to recoup their loss just to break even! Here is an example of the cost of negative equity to the average homeowner:

ARIZONA SHORT SALEJane Seller purchased her home in 2005 for $200,000. Because of the market crash, her home is now worth $100,000. Jane put no money down on her home and owes just under $200,000 now. At the average national appreciation rate of 6% it would take Jane approximately 12 years for her home to be worth $200,000 again or 9 years before she could sell her home and break even, making $0 profit and paying her own commissions and closing costs.

ARIZONA SHORT SALEIf Jane sold her property in a short sale, she could rent a home for the next 2 years and then purchase her exact same home for nearly half the monthly payment. If she was paying $1,250 per month for her old home, her new home would be closer to $700 per month! That is $550 a month that she can put back in her pocket!  If Jane stayed in her home for the 9 year period it would take her to break even she would spend nearly $60,000 in higher mortgage payments and a total of $135,000 on mortgage payments just to break even!

The Real Estate and Beyond Team is here to assist all homeowners located in Arizona to define their options in a more detail manner in order to make a better informed decision.

START MY ARIZONA SHORT SALE TODAY

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Feel free to listen to my Radio Show to learn more about the phoenix real estate market, new trends, and the latest opportunities.  The Real Estate and Beyond Radio Show Airs every Saturday from Noon-2:00pm on Conservative Newstalk KKNT 960am in Phoenix, Arizona.  You can listent to past shows, or stream on-line.

 

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Rainmaker
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Michael Ford
Coldwell Banker Heritage Homes - Marion, AR

Harry this post really makes you think.  However if someone can afford to make their payment should they continue?  Someone which means the rest of us will be paying the difference!

Aug 01, 2010 10:12 AM #1
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Harry F. D'Elia
Precision Real Estate Inc. - Phoenix, AZ
Investor , Mentor, CSSN, Radio Coach, REOs, ABR

Great point-However, that decision is left up to the homeowner. That is a personal decision. It comes down to a business decison. Welcome to America

Aug 01, 2010 10:16 AM #2
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Eric Villaverde
DoubleTree Home Inspection Services L.L.C. - Phoenix, AZ

Do you see many people become confused on what to do?

Aug 01, 2010 10:18 AM #3
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Harry F. D'Elia
Precision Real Estate Inc. - Phoenix, AZ
Investor , Mentor, CSSN, Radio Coach, REOs, ABR

Eric-great question. My job is to give the homeowner the correct information to make a better informed decison. I have them consult with a real estate lawyer and CPA so they know their options when making decisions.

Aug 01, 2010 10:19 AM #4
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Katiejo Franks
Real Estate and Beyond, LLC - Scottsdale, AZ

I know many people who are upside down in their home. They have lost hope.

Aug 01, 2010 10:23 AM #5
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Harry F. D'Elia
Precision Real Estate Inc. - Phoenix, AZ
Investor , Mentor, CSSN, Radio Coach, REOs, ABR

I come across many people who have lost their direction. That is because they are trying to do it by themselves. Please contact a Realtor who knows Short Sales.

Aug 01, 2010 10:24 AM #6
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