Short Sale Specialist in Philadelphia

A short sale is when your bank agrees to accept a lower payoff than what they are owed in order to approve a sale of the property.

Short sales are becoming increasingly common as the housing crisis has accelerated and many home values have depreciated since an owner purchased. In all these cases, the value of what a house can be sold for is less than what it is worth.
In our Philadelphia real estate market, we have noticed that the average realtor will list a property for way over what it is worth in hoping that it sells. Of course, it rarely does and even if an agreement does come in, chances are it will not appraise. The better solution is to look at the circumstances to determine if the house should be marketed as a short sale candidate.

Without going into too much detailed discussion, the process is extremely complicated and time-consuming. But it can be very beneficial to a seller who is in desperation and does not want their credit ruined as a result of a foreclosure and very beneficial to a buyer who has an opportunity to procure a property below market value. As real estate agents, we have successfully completed many short sales for our clients who were so appreciative of the outcome. In several cases, their properties were even listed with prior realtors (in one case 3 prior realtors) who never even explored the option of doing a short sale.

Typically for a short sale to be approved a seller has to have a level of hardship and is behind on their mortgage. Although we did have one short sale approved for a seller who never missed a payment on her Northern Liberties condo, but had a case of extreme hardship due to her husband passing away.

Are you in a predicament where a short sale may be your best option ? If so, contact Chris and Stephanie Somers at 215-400-2612 or thesomersteam@yahoo.com to discuss further.

Stocks vs Real Estate - The Ongoing Debate

Stocks versus Real Estate - Lessons to be Learned

I think as individual investors we can all come to conclusions which investment classes are most suitable for us as far as meeting our individual goals. Over time, the debate will always continue and sway back and forth over the question "What is the better investment ? The stock market or real estate ? "

In times like this, I think it is pretty simple. Companies like Merril Lynch, Lehman Brothers (LEH), Washington Mutual (WM), AIG, Wachovia to name a few are down 60 to 70 to 80 percent in the last 1 year ! Lehman brothers is down close to 90 percent ! These are all investments that the average stockbroker or investment banker would have promoted as "conservative" or a vital part of a stock portfolio. This list does not even include a Fannie Mae (FNM) or a Freddie Mac (FRE).

The risk here is even with a 5 stock portfolio, just having one of these equities would have destroyed a portfolio. Now some will say, these companies do not represent the whole market.

True.... so lets see what the market has done.

In the last year, the Dow Jones Industrial Average is down approximately 21 percent - see 1 year chart .
The Nasdaq is down 15.4 percent in the last 12 months - see 1 year chart .
Conversely, Toll Brothers is up 20 percent over the same periord !!! Who would have thought ? - see 1 year chart .

Either way, outside of California, Florida, Arizona, and Nevada, how many individual brick and mortar homes lost 60 to 80 percent of their value like a Washington Mutual, Lehman Brothers and so forth ? Further, the average real estate investment property generates cash flow from the rent received. Are the stock market companies paying dividends that can match the rent received ? No !!!

I met with a client yesterday who is pulling out $90,000 in the stock market to buy an investment property in Old Kensington (Philadelphia Real Estate). He told me, "Chris the stock market just has not been my friend in the last 10 years." I agree, it has not been mine either. He elaborated by saying he will put the $90,000 (he is paying cash) in this property as the investment will be in his control. He can touch it, see it, improve it, rent it and so forth. He can see the neighborhood improving around him. He knows the average comparable property sells for around $130,000 so he knows he is getting built in equity off the bat. Can the stock market provide that ? No !!! He does not have to worry about, of the $90,000, that his broker will not place more money in the likes of Fannie Mae preferred stock which lost pretty much all of its value one day last week ! Ouch !!!

This will certainly be a topic to discuss more. I know diversification is always key. But over the long term, real estate certainly has to be a sizeable percentage of an investment portfolio.

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