Editorial

Front Page - Friday, November 12, 2010

Real Estate Facts

Salvaging credit and equity

Elwynn Schwartz

The issue of pricing strategies was recently addressed here, particularly for facing moving deadlines or selling a home that’s languishing on the market. But what if you’re experiencing financial hardship or losing valuable equity in your home?
If you’re facing mortgage default and want to avoid foreclosure, you’re probably looking at a short sale, an agreement with your lender to sell your home for less than what you still owe. This pricing strategy is challenging, because you have to list high enough to satisfy the lender, but low enough to attract buyers.
First, complete a short sale application from your lender and get a quote for how much they’re willing to accept. Work with a reliable real estate agent to find the sweet spot between what the lender wants and what will excite buyers, and you may be lucky enough to receive multiple offers.
If you’re not defaulting, but your home has lost significant value, you’re still in a tough situation. If you bought during the peak years, you may have trouble salvaging your equity in today’s market.
While painful, the best pricing strategy in this case is to ask your agent for a Comparative Market Analysis (CMA) and price your home at fair market value or below. Again, if your price is right, you may encourage multiple offers, resulting in a higher sale price.
Elwynn Schwartz is the owner of Chattanooga Real Estate Consultants and may be reached at 423-894-3050.

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