Will homeowners “under water” with their homes add to buying opportunities?

The effects of the so-called ‘Strategic Foreclosures’ are the wild card for housing in 2010-2012. Millions of homeowners are now upside down in their homes. There are many reasons to believe that their homes will remain ‘under water’ for years to come. In mid-2008 it was reported that the short sales realtors were closing had largely been on behalf of sellers who were choosing to do a strategic default.

Why should a home owner keep paying on a home when they are upside down? Is there some sort of moral aspect to paying on a mortgage even when it is so severely upside down that the ‘home owner’ has become…in essence…a tenant with their mortgage company as their landlord? You might be surprised to learn that there are absolutely no ‘moral imperatives’ to pay an upside down commercial loan. Once the commercial property stops making financial sense borrowers often choose to do a ’strategic default’. This has been a normal aspect of commercial loans for years…so, why is there such a double standard when it comes to residential.

Christine Snedaker of Golf Club Realty completed the Certified Distressed Property Designation (CDPD) which allows her to specialize in real estate short sales.