After a decade of specializing in short sale real estate transactions, I could truly write a book about all the crazy things what I’ve seen. Odds are if you are calling me, things have not gone as planned and there’s a jam that needs fixing! From helping hundreds of short sellers move on to better days, here are 4 things I’ve learned and I wish everyone knew about home ownership:
4. Never get into home ownership situations with friends or family.
Maybe your brother needs a co-signer today and you really want to help. Or...you and Mary have been best friends forever…since you’re both single now, why not just buy that house together? STOP! Before you do any of this – stop and think hard. How much do you value this relationship really? Would you like it to continue indefinitely, without a disturbance over a financial woe? Do you wish to avoid fighting over money with this person one day?
As a mom of three boys myself (two reaching home buyer age) - while there is next to nothing I won’t do for my boys…will I be co-signing any of their mortgages? NOPE. And not because I’m cruel and I want them to suffer…..but because I love having them in my life! THINGS HAPPEN. There’s nothing like some missed mortgage payments to drive a rift into any relationship, and it only gets worse from there. I’ve seen families and friendships torn apart over house and mortgage issues - countless times. If you are really considering getting entangled in a mortgage with a friend or family member - please, please, please talk to a lawyer, an accountant, anyone who can spell out your true risk/worst case scenario. Or even just ask me! I have joint-ownership gone wrong stories to make you cry… my advice - just don’t do it!
3. Banks will never truly care about you.
When times get tough it’s a good idea to speak to your lender – but their word is not gospel. No matter what any bank’s “relationship manager” or “homeowner assistance specialist” tells you – they have a single interest – making money. Doing “the right thing” doesn’t buy you brownie points to help you out of a jam later. Your lender will never tell you not to drain your 401k to make your mortgage payments (even it’s simply a bad idea for your future). Your lender will put you into a loan modification even if you still end up $100k upside down in your loan, even if it just postpones your problems for another day.
Keep in mind that your lender will always seek the most profitable route for them – not you. You may not always want to take financial advice from those you owe money to. Listen, but seek other non-objective professional guidance and look at the big picture when making financial decisions. Banks are only vested in making profits. Don’t take it personally!
2. There is no shame in seeking a workout when things have gone wrong.
A short sale is not a terrible, shameful secret…and for that matter neither is a loan modification or a deed in lieu or a foreclosure or even a bankruptcy. Life happens and you deal with it, and life will go on after. The sooner you accept that you’ve gotten into a jam and take action, the sooner you will move past the difficult time and onto better days. Sticking your head in the sand for shame or embarrassment never made anything better in the end.
1. A house is just a house.
I know, I know….memories were made there….you made it your own…its “home”…but at the end of the day it is just a structure. If it has become a financial burden that you can’t make right, it is time to let go of your attachment to what is ultimately an inanimate pile of wood and concrete, and allow yourself to disconnect emotionally and leave it behind. There will be another house, I promise…. And in the mean time home is wherever you make it.