photo credit: The-Lane-Team

A lot of people think that homes are the only things that are foreclosed on, but that’s simply not true. A lot of commercial properties are lost that way, too, because people can no longer pay for them. It may be that they had a commercial property for their business and the business closed, or it could also be that they rented out the building to tenants, and those tenants went out of business. Either way, it can become very difficult to pay for a commercial space if there isn’t any income being generated in it.

It’s frustrating for the person who bought the building, and it’s frustrating for the lender who extended the money for the building. Both will generally lose in a foreclosure situation. The up side to that issue is that it’s a great time for buyers to purchase commercial buildings. If they have the money and/or can get the financing, they can buy properties for a fraction of what they would have needed to pay at the height of the property bubble. Most people thought the pricing bubble only affected houses, but that wasn’t necessarily true. All property went up in value, and the vast majority of it came crashing back down, making it a true buyers market – but only for buyers with good credit and decent down payments.

If you’re looking for a good commercial property, now may be the right time for you to find something great. Check around in your area and see what you can locate, because the odds are good that you’ll be able to negotiate much more now than you would have been able to even a few months ago. The longer a property has been on the market, and/or the closer it is to going into foreclosure, the better chance you’ll have of getting it for a price you’re really happy with.

photo credit: showmeone

There are various areas of the country where the foreclosure rate is actually dropping. It may seem surprising to people who live in areas like Phoenix or Miami, where the foreclosure rates are still extremely high, but there are small pockets of improvement in the housing market and the number of foreclosures that are being seen. Northern Florida, in the Panhandle Region, is one of those areas. Not all of the counties are doing well, but a few select areas are seeing lower foreclosure numbers that are steadily dropping. That’s good news for home sellers in those areas, because it means that their home values will start going back up.

It’s also quite possible that more homes will sell, because there are fewer foreclosures – which will mean fewer homes on the market overall. Buyers won’t have as much to choose from, but sellers will have a better chance of finding buyers for their homes and getting the opportunity to go on to whatever comes next. Then they can be buyers in another market, and improve the chances of yet another seller getting to relocate to somewhere that he or she really loves. It’s all cyclical, but the economy has been in such a rut lately that the cycle has slowed dramatically. In some areas, it feels like it has almost stopped.

Where foreclosures are dropping, hope is slowly returning to sellers and real estate agents alike. There is more opportunity to find great homes, and the people who make their living selling them are happy because they can see a light at the end of the tunnel. While it may still be several years before the market recovers completely, the early signs are encouraging and it’s good to see that sellers have something to look forward to in the relatively near future.

photo credit: Mike Licht, NotionsCapital.com

In real estate, the term “shadow market” refers to foreclosure-eligible houses. Although owners have not made payments, the lenders have not begun the foreclosure process yet. Some owners would sell their homes if they thought they had a chance of selling them. Others rent the houses. Both of these situations are fraught with peril. In a rental situation, a shadow market makes it uncertain that the renters will be able continue living in the home from one month to the next. If a lender forecloses, it could mean the renter will lose the security deposit and any advanced rent payments.

This uncertainty is one of the reasons that some renters, put in this unenviable position, decide to stop paying their rent altogether. Some renters may not know whether to pay a property manager, the landlord, or the lender. As there is a contract in place between the renter and the property owner, experts say renters must pay rent to the property owners, according to the contract. Some critics attribute renters’ reticence to a desire to exploit a loophole; however, it seems more likely that the renters worry more about protecting themselves rather than cheating the system.

When a homeowner files bankruptcy and includes a rented foreclosure in it, bankruptcy law almost gives the homeowner a free pass, because the bankruptcy will discharge the debt, such as the security deposit and advanced rent payments. Once the lender forecloses on the property, it can evict the renter.

Fortunately, new legislation by the Obama administration combined with the diligent work of bankruptcy lawyers and judges have forced many landlords to treat their renters fairly. These efforts have more or less secured renters the right to 90 days to move out or to live in the house in question until the end of the lease. Yet, even with these protections, renters may still worry about the shadow market.

Nobody wants to lose their home, but sometimes in the midst of your family financial crisis, you may not be thinking straight enough to see all the possibilities for avoiding foreclosure on your mortgage. Some ideas to consider include:

• Talk to your bank or lender. It’s actually better for them if you are able to keep paying on your mortgage, even if it is at a lower rate for a while, compared to foreclosing and them having to sell your home. They might offer several different options, if you ask early enough, like restructuring the loan over a longer period of time, or reducing or suspending payments for an agreed length of time.
• Your lender might also provide financial counseling and advice which would include assistance to help you set up a budget and pay at least part payments towards your mortgage.
• Get a second job for a limited period of time. It may involve sacrificing hobbies or family time, but if it is only for the short term and it obviates the need to sell your home, it’ll be worth it. If you’ve lost your job, be prepared to do any kind of work for a while rather than waiting for a new opportunity in your own profession.