Even if I can afford the mortgage, it doesn’t make sense.

The other day during a listing appointment for a possible short sale in Surprise, Arizona, the seller said, you know I was going to short sale my home last year, but so many possible buyers came through and saying what a lovely home I had, that I wanted to try and stay in my home. Surprise, Arizona is one the hardest hit areas in Maricopa County for property value declines. She asked her bank for a loan modification and received one. I asked her about her modification and she said the bank gave her interest only @ 5%. Big deal. The bank wasn’t trying to help this owner at all. She wasn’t not going to be able to pay down her principal and the bank still made money. The loan would re-cast in three years.
Fast forward 7 months. This homeowner is a teacher whose wages have been cut due to our states budget shortfall. Sure she could struggle with the payment. But when we showed her the comparables (she bought for 400,000) and it is now worth 200,000—she threw her arms up in the air and said what’s the point? What is the point exactly? By no fault of her own, the market fell out from beneath her and her home is worth 50% than what she paid for it. She would have to be in this home for 10+ years in order to even break even.

Her home, in a lovely community in Surprise, AZ is now on the market, and for some lucky buyer they will purchase a gorgeous home.