In many parts of the country, home prices doubled during the period from 2000 to 2005. During this same time, creative financing programs (e.g. zero down payment, adjustable rate loans, interest only loans, option ARMs loans, negative amortization loans, etc.) gained popularity and helped some people buy homes who would not normally qualify based on their income, debt level and credit history.

Most real estate markets are now cooling, and some are even experiencing declining prices. In times of dropping real estate prices, the amount owed on a loan by some homeowners may actually exceed the value of a property. If homeowners cannot make their monthly mortgage payment, there is a potential for default on the loan and foreclosure of the property by the lender.

The term “short sales” is used to describe a situation in which a homeowner is at risk of defaulting on their loan, and the lender agrees to sell the property below the original appraisal price in order to avoid foreclosure. Most lenders do not readily agree to short sales, although exceptional circumstances such as a homeowner losing his/her job or the death of a wage-earning spouse may make some of them more open to doing so.

If a property is sold as a short sale, the lender recoups at least a portion of the original loan amount, the homeowner avoids the stress and stigma of foreclosure, and the new homebuyer gets a property below its original appraisal price. If a short sale doesn’t work, then the property usually goes into foreclosure.

Short sales may be an emerging trend as the rate of foreclosure is rising dramatically across the nation. According to Business 2.0 Magazine, the top 10 foreclosures markets are:

1. Greeley, CO
2. Detroit, MI
3. Miami, FL
4. Indianapolis, IN
5. Fort Lauderdale, FL
6. Denver, CO
7.Dayton, OH
8.Dallas, TX
9.Fort Worth, TX
10.Atlanta, GA

The credit of homeowners may be impacted after a short sale, but it all depends on how the lender reports the outcome. Some lenders report a partial loan repayment as full payment of the debt due, which does not adversely impact the credit of the borrowers. Other lenders report the sale as “settled,” which adversely and significantly impacts the borrower’s credit. The other problem is that the portion of the loan amount forgiven by the lender may actually count as taxable income by the IRS.

In summary, a successful short sale has some potential positive benefits (e.g., homeowners avoid foreclosure, lenders recoup at least a portion of the loan amount, new homebuyers gets a property at below the original appraisal price, etc), but there are also many negative consequences. Some of these potential negative consequences include: the negative impact on borrower’s credit, negative impact on the value of other similar homes in the neighborhood, and that the amount forgiven by the lender may be taxable event. Homeowners having difficulty making their monthly mortgage payment may benefit from talking to a real estate agent who is experienced in short sales.

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New Financing for South West Florida, mortgage information, how to handle short sales, multiple offers www.topagent.com

Help answer the question about real estate financing

I have bad credit is there any way to get real estate financing?
i mean actual money in my name real financing. not the so called creative financing way. Are there any grants available for people like me?

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What most people do not realize is the fact that real estate agents are normally paid by the seller, not the buyer. As a buyer, you go to work with a professional real estate agent without really having to pay for yourself. Policies can vary considerably from state to state and company to company, so you should always check any documents or contracts offered to you to ensure this is the case. When you are interviewing agents, make sure to ask about any fees as well.

A lot of Realtors out there may work with buyers and sellers, although most specialize in working with the buyer or seller. If you are buying a house, make sure the agent you choose has prior experience in working with buyers and transactions that involve no money down. Thus, you can expect your agent to be there when you need it most – especially if you have no down payment.

If you are interviewing a real estate agent and he or she is not familiar with payment assistance programs, you should not hire their services. Agents who are not familiar with these types of programs are generally not on the level, or may lack the expertise to help you buy the home of your dreams.

You can also make a list of real estate agents that you can interview based on referrals from friends, lenders, and even family. Lender referrals are normally a great choice as most lenders have worked with their recommendations in the past, and both are already familiar with each other. Choose a referral can also prevent lenders who are obstacles or surprises.

When you interview a real estate agent, make sure you have the agent explain his fees. In this way, you know exactly how much you will be getting from the purchase. You should also know how much experience you have in the field, and how long you’ve been working with real estate. You can also ask about sample contracts as well. If you are buying a home, you must ensure that the agent works with buyers. If you happen to sell your home, then you want to make sure the agent works with sellers. The officers engaged in one or the other are the best to choose as they will have more experience than agents working with buyers and sellers.

Find a real estate agent is an easy task – providing you know what to look for. If you take things one step at a time and carefully make a decision, you may end up with an agent who has the experience you want. Always be careful when choosing, and not rush the process. Real estate agents are easy to find, although finding one that suits your needs and has your budget in mind is a little harder to locate. In making the final decision, always choose an agent who has your best interest in mind – and not just the money.