Being Upside Down the Jersey Shore Does Not Mean You Have To Sell...

Homeowners are bombarded on a near daily basis with conflicting information as to the mortgage/housing crisis on a national level, but what really matters is what is happening in our neighborhoods and towns here at the Jersey Shore. I am consistently asked by friends, neighbor, a client, etc., "How is the market?". The answer (which they knew already) is that the market is down. Down, referring to prices and number of units sold, not the amount of properties available. Competition amongst sellers is fierce and will only get fiercer as the inventory of unsold homes continues to grow.

So what does "upside down" mean? It means that the mortgage(s) on a home is greater than the home's current market value. The upside down homeowner is the most confused (and abundant) of all the sellers in the market. With terms like "strategic default" and "short sales" being thrown around, what is an upside down seller to do?

I am going to address the first case scenario of an upside down owner; which is the owner that is making their mortage payment and is not behind or in default. The good news(?) is that just because you are upside down, it does not mean you have to sell your home. You should also kow that it is not a reason your bank will accept to permit a short sale to occur either. What is a short sale? A short sale is when your mortgage holder will accept, less than what is owed to permit the sale of your home to another party. However, it does not mean the mortgage company will forgive the difference between the sales price and the mortgage either. You could still be held accountable and responsible for the difference!

What is amazing to me is the number of homeowers putting their house up for sale for no other reason than this very scenario. Although owning a home is considered the average person's biggest investment, it is also just that; you home, your castle, your refuge. The reality is that you will still need to live somewhere, you will still be either paying a mortgage or paying rent (gasp!). If you are in the position where you are making your payments and do not have to move due to a job change or life circumstances, then don't put your home up for sale. The bottom line is that unless you are ready and able to chip in the difference, trying to sell your home at the Jersey Shore now will not be a benefit to you.