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Billie Said:

What happens if you sell your house below payoff?

We Answered:

With all due respect to the other responders, you CAN pay off a house with less money than you actually owe. It's known as a 'short sale' and you can negotiate one with your bank or mortgage company. They would rather take a short sale than let you go into foreclosure, because foreclosures have the potential to be disastrously expensive for a bank. Ask your bank what steps you need to take in order to work this one out, and make it obvious that you are doing the best you can to be honest with them about your situation.

Stephanie Said:

Condo association financial problems?

We Answered:

Unfortunately, your situation is becoming increasingly common among condo or Homeowner Associations. You did not mention if you were a Board of Director member, but ultimately, it is up to them to manage their way through this financial hardship. The short answer to your water question on water is that if you don’t pay your water bill, it eventually will be shut off. If you don’t pay your obligated insurance, the BoD could be sued for not meeting their fiduciary responsibility. You would also be exposing yourself to yet a more severe financial risk that could make your current financial problem look pale in comparison.

There is no easy answer to this problem, as it will take lots of hard work and making unpopular choices. But, something has to give. Just sitting back and ringing one hands does little to solve the problem. I commend you getting involved and exploring options for your condo association to consider.

My first suggestion is that expand your scope of cost reduction possibilities beyond water and insurance. There are lots of budget line items that could be contributing to your financial problem. Each one of these should be thoroughly examined and taken apart for savings opportunity. You must find these savings quickly, as it sounds like you are experiencing considerable “bleeding” of your association financial resources. The following 10 Quick Hitters will offer you the most potential for savings in a minimum amount of time.

- Arrears payment collection
- Management Company services
- Administration
- Utilities
- Insurance
- Purchased materials and services
- Litigation
- Preventative maintenance
- Reserve funding
- Taxes

If you wish to find more information on this topic, including a “how to” approach, visit www.condopresident.com.

Good luck
JoeK

Terrence Said:

We are buying a house, how do we find out how much the insurance will be.?

We Answered:

Call a local agent or three, and ask them for a quote.

Some companies surcharge for a pool, for the liability, and some don't. As long as the pool is properly fenced in, it won't CREATE a problem. An unfenced pool, however, could make the house uninsurable.

Craig Said:

Do I still have to keep home insurance on a vacant home if I'm negotiating a short sale or can I cancel it?

We Answered:

The bank will only forgive your debt on the Short Sale if it actually sells. So, not keeping the house up will turn off prospective buyers. Then, the house doesn't sell, the bank forecloses and your credit is tanked. So many people believe that if the bank is willing to Short Sale, you can just wipe your hands clean and walk away. You are incorrect. A Short Sale is a cooperative undertaking between you and your bank to make the best of a bad situation. If you don't hold up your share of the bargain, why should they hold up theirs?

I am shopping short sales right now and I refuse to even look at a place that is neglected. It tells me the leach of a seller is taking advantage of the bank and will probably take advantage of me by raping the place before I move in. That is the kind of message your are conveying to potential buyers. Bear in mind there are Short Sales every where and only so many buyers. So, if you don't want to lure in a real buyer prospect, you're going to go down the tubes with that mortgage.

It's your call. Oh, and regarding the insurance, the bank will not allow you to cancel the policy and leave it uninsured. That would be a default and result in forclosure too.

Edna Said:

How can I be sure my boyfriend understands the amount of money that is spent on bills and day to day expenses?

We Answered:

I'm very concerned about the maturity level of this guy. He's 49 and has never lived on his own? That's not really that big a deal I suppose, although it is very rare, considering he has no knowledge of budgeting or saving money. You are taking on a serious commitment here and that's tough enough without having to be a mother to him as well. Yes, I said MOTHER. You are going to end up keeping an eye on him and his spending and that can eventually wear you down. Perhaps a course in money management for the both of you would be beneficial? And re-examine your needs in this relationship. Is he responsible and mature enough to handle you and your needs?