A Rational Approach to Foreclosure

October 19, 2011

Foreclosures, Short Sales

In order to clear inventories from their books, banks are quietly offering incentives to buyers who would be willing to relocate or simply move out of their homes to facilitate a short sale.

There are sporadic reports of some people being offered as much as $20,000 to move out of their homes.  But these are exceptions rather than rules.

The average offering is about $3000 and often times, agents of mortgage servicing organizations will low ball a homeowner while using scare tactics in order to coerce them into accepting a bad deal.

An argument could be made that the homeowner has defaulted and they should just clear out, but then again, why do so when you have nowhere to go.

Case in point is my friend Jim. Jim was a city worker who was laid off and could not find a job.  He stayed in his condo for as long as he could until he was evicted.

Then he traded in all of his frequent flyer miles on discount hotel costs.  Finally, he moved into his car and used his gym membership to shower and watch TV.

It was very tough for him but he finally found a job and got back on his feet.  The point is that $3000 might have bought him a couple of extra months in motel rooms, but he got almost a year with a roof over his head by staying in his house until the very end.

You may be in a position that for whatever reason, the bank makes you a lucrative offer to move out of your home prior to foreclosure.

If the money won’t allow you to put a roof over your head for the same amount of time that you have left before eviction, stay in your property until they throw you out.

If it is in your best interest to move out early, do so.  You are doing nothing illegal nor unethical.  You are being rational.

The definition of rational is acting in one’s own self interest…

Appraisal Source is a New York based residential real estate appraisal firm. Their highly-qualified appraisal staff provides independent residential real estate appraisals throughout Long Island and New York City.

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