How about I buy your current home for some percentage of appraised value and sell you a brand new home in a neighborhood of surplus homes that I built two years ago and can’t sell? And if you choose to use my home building company for your new mortgage and allow me to further gouge your financial eyes out, I’ll throw in stainless appliances and granite counter tops that I already own and am having trouble making the payments on as well. These are difficult economic times for us all and everyone is affected. The above offer is the latest creative financing idea brought to you by homebuilders who overbuilt and are approaching final calls on their construction debt from their lender. I have had more than one call from clients who were extended this offer. So let’s analyze one possible scenario. You currently own your home in a stable, established neighborhood. Due to the present economic conditions the value of your home has decreased 5-10% but you still owe only 80% of the current value. So you are going to sell that home to the builder at a 20% loss and purchase a new home in an unestablished neighborhood of mostly vacant new two year old homes and you are depending on others to accept the same offer. Also, every home has to sell at or near the price you paid in order for the others to appraise in a down market. The builder now owns your home at a 20% discount, which his bank/lender is going to love and they both stand to profit handsomely on its sale when the market turns and buyers are looking for homes in established neighborhoods with stable school districts and little new construction to compete with nearby. Meanwhile, you have seen little to no appreciation because a few of the homes in your new neighborhood remain unsold or sold at deep discounts during the final closeout sale. And if you have to sell the new home, even though the economy has recovered, you are competing for potential buyers with brand new homes being built across the street. If you truly want a new home, consult a professional real estate agent and a licensed mortgage professional to explore your possibilities. Then take a little more conservative, traditional, long term approach. Sell your current home on your own, and then buy your new home with the extra 20% in your pocket. During these uncertain economic times it is imperative that our clients and colleagues keep their personal and professional finances in peak operating condition. Call the David M. Damare’ Team for a complete mortgage analysis and basic financial advice to ensure your short and long term goals are being met so as to secure your financial lifestyle. “Mortgage Lending is Our Business: Customer Service is Our Passion.”Stay tuned and stay in touch with your mortgage professional. Thank you for the opportunity to serve you and your clients. David. 919.851.0999.
