Recent Unemployment Spike vs Real Estate Markets
In a recent post I indicated that because of the excessive number of unemployed people there could be an increase in short sales and foreclosures in greater numbers than we saw in 2008. This would also result in a decrease in property values. Recent economic activity seems to indicate that this hit to real estate could be short lived compared to other economic down turns but that is no comfort to the millions of people who have lost their jobs and are uncertain about the prospects of those jobs returning.
If you find yourself in the situation of facing a short sale of your home, foreclosure or worse DO NOT PANIC. Hysteria spreads worse than the coronavirus. Don’t become paralyzed with the inability to make a decision and move forward. Accept the fact that your world is collapsing and there is no way out for only a day or two. It is then time to formulate a plan to either sell your home with as few consequences to your future well being or keep your home. Just ignore the effect of COVID-19 on real estate markets, at least for the short term.
Knowledge is king and is a great remedy for stress and anxiety. You need to gather as much information as you can about the short sale and foreclosure process. Your mindset at this point will be a great factor in a successful outcome. Turn this into a game where your goal is to win.
Find a realtor who has been through all aspects of the process before. The process could take anywhere from three months to five years. The longer the process goes the better your chances are of keeping your home especially if the economy improves quickly, as is anticipated.
The biggest trick is to select the right realtor. Unfortunately, most realtors have no idea how the process works. They might have been involved in a short sale transaction before but the attorney for the seller is probably the one who coordinated the process with the bank and lien holders. Sad to say, realtors do not like getting involved in short sales because the time involved in completing the transaction is not equal to the compensation of the respective commission. Your realtor needs to be you advocate, have patience and be able to negotiate with the bank and any other entities that might have a financial interest in your property. The realtor needs to explain all the aspects of the short sale and foreclosure process to you until you are an expert and are confident enough to work with the realtor to develop a successful strategy.