Birmingham MI Real Estate Homeowner Takes $100K Loss, Says No To Foreclosure
Posted Aug 8, 2008 @ 1:24 pm, Viewed by 502 Visitors, Read 572 Times.
I have always been told growing up "BUY REAL ESTATE, YOU CAN'T LOSE" Well as we all know, thats not necessarily the case. This young generation will not soon forget about these times, and like any investment your money can go up, but it can also go down. Real estate is no different.
Don't think you have it so bad till you read about the loss this homeowner is going to take just to keep his credit score perfect. Most homeowners would just walk away from this home and give it back to the bank, but not this seller. He said "Mark, my name and my credit is everything to me and when I bought this house I promised the bank I brrowed the money from to pay the loan off, and I will do that no matter what it costs." I was inspired by his dignity. He realizes that in this country, credit is more important than money itself most of the time.
Think about this, if you have no credit, you can't even get a cell phone in most stores. If you have no credit, then you must live off the cash money you have. Try doing that for a couple months. Try putting away your credit cards and paying cash for everything. See how much fun that is. Even if you had a boat load of money, it won't last long if you have to pay cash for everything.
Just to give you an idea of how bad the market is in Metro Detroit, check out this deal. The location is considered prime by most residents in Birmingham, Michigan. It's located west off of Woodward Avenue inside of Oakland County, one of the top 5 wealthiest counties in the United States.
The Owner paid $232,000 back in 2004 and lived in the house for awhile but business got real bad and he picked up his family and moved to Florida. He is in the granite business and as you know, not so many people are upgrading their house with such luxury amenities as granite. The SEV is $116,000, putting a value of $232,000 according to the city of Birmingham.
Get this we started off listing this around $200,000 and we have been lowering the price every month trying to generate an offer. WE ARE CURRENTLY LISTED AT $154,900. After all the costs associated with selling the home, the owner will lose over $100,000 just to keep his credit score. The home is surrounded by $500,000 & up homes! Homeowners and investors at one time would buy older homes on this street for $200,000-$300,000 and just tear them down, only to build a huge mansion.
This Charming and totally updated bungalow is located on Emmons street. Walking distance to downtown birmingham where there is plenty of shopping, coffee shops and eateries. The home has a New kitchen. Hardwood floor have all been refinished and look new. coved ceilings. Bath has been updated and looks new and modern. Living room had bay window. Huge master suite. Partially finished basement with storage.
If you truly can't afford your home then you have no other choice but to foreclose. But there are a lot of homeowners that are just foreclosing and giving back the keys because "It's the cool thing to do in todays world." I even hear people bragging about foreclosing on their home and how bad of a loss the bank took. People this is no joke, and in time this will effect the entire country. When banks are going out of business, you gotta start wondering whats going on. I'm 33 years old and I have never heard of a bank going out of business.
I would love to hear any other agents or homeowners with a story about a homeowner taking a huge loss. It may make some of the homeowners out there realize that breaking even and just being able to walk away, isn't so bad.
For more information on Birmingham Michigan Bank Foreclosed Homes or general information on the City of Birmingham and the homes for sale in Birmingham Michigan visit my website website at www.markzproperties.com
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Social Bookmarking11 Responses to “Birmingham MI Real Estate Homeowner Takes $100K Loss, Says No To Foreclosure”
I just closed on a home that my seller owed more than what it was worth and the bank took a $250,000 loss. They actually had all the paperwork and approval in about 3 weeks and we closed on the property in 45 days from offer to close date. This is the way things are right now and for some time to come until the dust settles...
You're right Robert, Short Sales are going to be a good majority of sales in the next 3-5 years. Banks used to be cocky and no so willing to talk about doing a short sale, but I have found the past 6 months they are very open and willing to do what it takes to sell the house short of whats owed.
I listed a home in Wesley Chapel, FL (Tampa area) a few weeks ago for $299,900. The owners purchased it in December 2005 for $499,000.
Oh my gosh, Lance!! See this is what I mean there are some real horror stories out there about some people taking some real losses. Unbelievable!!
The only question with that listing is (assuming this is a short sale) is if the bank will accept that loss. Each bank is different, I had one bank refuse to take an offer that was within $5k of payoff amount...they ended up settling (about 6 months later) for $40k less (I had the listing)...the bank didnt listen to me and they endend up in worse shape after the fact
Robert,
I'm not sure if you are directing that question to me or to Lance, but my listing was NOT a short sale, the homeowner would not entertain a short sale and insists on paying back the debt he agreed to borrow. I am now hearing that banks are agreeing to entertain a short sale even if the client hasn't missed a payment. This is a very new development because now homeowners don't even have to blemish their credit and they can escape their loan.
I applaud your clients for wanting to do that...they may rethink things when they have to write that $100k check out of their own account when the time comes or after they do som research about what you just said on the last line.
It was directed at Lance...Some agents (and I am not saying that Lance is one of them with this listing, this is a general statement) put low ball prices just to get an offer...I try to price everything where it should be according to market and let the market decide if it is going to sell or not...putting a lowball offer just creates turmoil in the market place.
I understand what you are talking about with the low ball listing prices. I am getting sick of agents just slinging prices against the wall to get an offer. I assure you I do not do this and ALL of my listing prices are justified. I have been doing foreclosures and short sales for over 8 years now and have talked to mitigators about what they want to see. I wish agents would start getting educated on short sales instead of just going to these useless free seminars. Good education cost money.
Jannelle
The crazy part is when we ask Realtors if they see any sign of the market getting better, they all say it's only getting worse. I see reports that the market isn't going to turn around until maybe 2010. Anyone else have the same thoughts?
Home Owner That Got Out 2005
Good Luck with that "turn around" any where near Detroit....Birmingham became WAY OVERPRICED!!!! Wonder if the Birmingham and Bloomfield Hills snobs, have lowered those noses yet, if not they will soon!
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That's a big loss! So far our foreclosures in the southwest Chicago suburbs aren't taking that big of a drop, although there's a couple sitting on the market because the bank won't take lower than list price. In the meantime, the houses are deteriorating, the market keeps going down and these homes sit.
What I cannot understand is the credit issue with the people simply walking away. If they lose everything, including all of their credit cards, they can't even rent a car. But I guess for most of these people they can walk away from a mortgage but keep their credit cards as long as they're paying them on time. So they just don't care.
Will they regret it a few years down the road when things stabilize and they'd like their own home again? Or will they all be forgiven because of "the mortgage mess of 2007-2008" (whatever years you want to put down).