Financial

Navigating short sales and foreclosures

Those who can’t keep up with their mortage payments are in tough situations but they do have options

Published

14 years ago

October 11, 2011

For sellers who are upside-down (owing more than their home is worth) on their mortgages, especially those who need to sell their property, it helps to know the options available to extricate themselves from their mortgages.

There are government programs like the Home Affordable Mortgage Program (HAMP) of 2009, which aims to reduce the number of foreclosures by incentivizing loan modifications such that monthly payments are within homeowners’ means, but not all lenders participate, and not all borrowers qualify. In addition, some homeowners simply need to sell due to lost employment, a necessary move, medical conditions, etc., and can’t benefit from a reduced mortgage payment.

In the latter situation there are three main options available, all of which are unpleasant in one way or another. For homeowners with the means to do so, they may sell their property at market value and pay the difference between their loan amount and the sale price, in addition to the fees associated with the transaction. For some of our clients in this position, this has cost them upwards of $100,000, but there is really no limit, in theory, as to how much this may cost.

The second option is simply to stop paying the mortgage. A homeowner’s loan documents will outline the process for foreclosure to begin, which usually takes three months, but can take longer. Banks will contact their borrowers to determine the situation and hopefully to offer assistance in getting the payments back on track.

If a borrower can’t do so, the legal machine will grind into action to effectively evict the homeowner from the house. The ultimate effect is that the homeowner’s credit is severely tarnished, preventing him or her from obtaining financing for another home purchase for several years and also affecting his or her creditworthiness for everything from credit cards to cell phone plans, for up to seven years.

Many borrowers don’t realize that in many states, banks have the right to sue their clients for the deficiency amount, calculated as the difference between what they are owed (including legal fees, insurance and other costs) and what the property eventually sells for at a foreclosure sale. This suit can be brought even years after the foreclosure, so it can be a constant threat and a cause of anxiety for borrowers even after they feel a sense of relief when the foreclosure is finally finished.

Buyers of properties that have already been reacquired by the lending bank (listed as “Real Estate Owned” or “REO” properties) should know that the process is generally the same as with a normal sale. The bank generally behaves like any other seller, offering the property for sale and accepting or negotiating to get the best offer possible. The few differences include the fact that the bank will almost always offer the property in “as-is” condition only and the property will likely be in sub-standard condition (although not always). In addition, the listing prices for REOs are generally below market value, which drives many other buyers to be interested. Because of this, it is important to be able to offer the best terms possible, including a contract with as few contingencies as possible, a price that may exceed the list price (sometimes by more than $100,000) and with no financing at all, if possible.

Instead of allowing a property to go into foreclosure, a homeowner may opt for a “short sale” instead, which usually minimizes the possible liability they may owe. In this scenario, the sale price is less than the total debt on the property and transaction costs of the sale. Sometimes the proceeds are enough to satisfy one loan on the property but not another, and sometimes the proceeds are not even enough to pay a single debt on the property in full.

In any of these situations, the lien holder or holders who will not be paid completely will have to agree to take a reduced amount, or perhaps nothing at all, for the sale to go through. Usually the process can be handled by the homeowner themselves, or through an agent, but the process can be so cumbersome and unpredictable that we always recommend working with an attorney who specializes in short sale negotiations. Owners should accept the written agreements provided by the bank only if the deficiency amount is forgiven, if possible. This eliminates the chance they may be sued for that amount in the future, but it should be noted that they must pay ordinary income tax on the forgiven amount to the IRS as if that money were earned.

As a buyer, you must know that if you are interested in pursuing a short sale listing, there is a large chance the process will not be successful, even after many months of waiting. The chances of success go up sharply if the seller is working with a short sale negotiator, but even then there are no guarantees. Therefore it should be noted that a short sale is only worth pursuing if the price really is attractive enough to justify the risk involved.

Either way, the outlook for owners of properties in distress is not rosy. Foreclosure affects their credit for up to seven years and may result in a lawsuit to recover the deficiency. Short sales have a softer impact, although still significant, on their credit and may also expose them to liability for the deficiency amount, if that amount is not forgiven. And paying the shortage themselves at closing can be a very difficult thing to do, although it preserves the borrower’s good credit. If the property must be liquidated, however, one of these three options may actually allow the homeowner to move on with their lives and start working on their financial future with less of a burden.

Buyers can take advantage of the current market conditions to acquire a property in distress at a good price, but should be aware of the potential pitfalls, especially when purchasing a short sale property.

David Bediz is a Realtor at Coldwell Banker Residential Brokerage and part of the Dwight and David Real Estate Group. He can be reached at 202-352-8456 or through DwightandDavid.com.

Real Estate

Celebrate the power of homeownership this Fourth of July

Owning a home is powerful act of self-determination

Published

2 days ago

July 4, 2025

Scott Helms

(Photo by yootin/Bigstock)

This Fourth of July, celebrate more than independence: celebrate the power of LGBTQ+ homeownership. Explore resources, rights, and representation with GayRealEstate.com, the trusted leader in LGBTQ+ real estate for over 30 years.

Home is more than a house: it’s a symbol of freedom

As the fireworks light up the sky this Fourth of July, LGBTQ+ individuals and families across the country are not just celebrating the nation’s independence — they’re celebrating personal milestones of freedom, visibility, and the right to call a place their own.

For many in the LGBTQ+ community, owning a home represents more than stability — it’s a powerful act of self-determination. After generations of discrimination and exclusion from housing opportunities, more LGBTQ+ people are stepping into homeownership with pride and purpose.

Why homeownership matters to the LGBTQ+ community

While progress has been made, LGBTQ+ homebuyers still face unique challenges, including:

Housing discrimination, even in states with legal protections
Limited access to LGBTQ+ friendly realtors and resources
Concerns about safety and acceptance in new neighborhoods
Lack of representation in the real estate industry

That’s why the Fourth of July is a perfect time to reflect not just on freedom as a concept, but on how that freedom is expressed in the real world — through ownership, safety, and pride in where and how we live.

Finding LGBTQ+ Friendly Neighborhoods

One of the top concerns for LGBTQ+ buyers is whether they’ll feel safe, accepted, and welcome in their new neighborhood. Thanks to evolving attitudes and stronger community support, many cities across the U.S. now offer inclusive, affirming environments.

Some of the best cities for LGBTQ+ home buyers include:

Wilton Manors, Fla. – A vibrant LGBTQ+ hub with strong community ties
Palm Springs, Calif. – A longtime favorite for LGBTQ+ homeowners
Asheville, N.C. – Progressive and artsy, with growing LGBTQ+ visibility
Portland, Ore. – Inclusive, eco-conscious, and diverse
Philadelphia, PA – Rich in history and LGBTQ+ community leadership

When you work with an LGBTQ+ friendly realtor, you get insight into more than property values — you get a real perspective on where you’ll feel most at home.

Navigating the real estate process with confidence

Whether you’re a first-time gay homebuyer or preparing to sell your home as an LGBTQ+ couple, it’s essential to understand your rights and options. Here are a few key tips:

1. Work with a trusted LGBTQ+ real estate agent

Representation matters. A gay realtor, lesbian real estate agent, or LGBTQ+ friendly agent understands the unique concerns you may face and advocates for you every step of the way.

Use GayRealEstate.com to connect with LGBTQ+ real estate agents near you. For over 30 years, we’ve helped LGBTQ+ buyers and sellers find their ideal home and a professional who respects their identity.

2. Know your legal protections

While federal law (via the Fair Housing Act and Supreme Court rulings) prohibits housing discrimination based on sexual orientation or gender identity, enforcement can vary by state. Make sure to research:

State-level housing discrimination laws
Local LGBTQ+ protections and resources
What to do if you experience discrimination during a transaction

3. Secure inclusive financing

While most lenders follow fair lending rules, it’s smart to seek out banks or credit unions with LGBTQ+ inclusive policies and a history of non-discriminatory lending practices.

4. Plan for the future as a family

For same-sex couples, especially unmarried partners, it’s vital to review how you’ll hold the title, designate beneficiaries, and plan your estate.

Ask your agent or attorney about:

Joint tenancy with right of survivorship
Living trusts
Powers of attorney and healthcare proxies

Selling a home as an LGBTQ+ homeowner

If you’re listing your home, working with a gay-friendly real estate agent ensures your identity and story are honored — not hidden — in the process.

Highlight:

Your community connections
Your home’s role in creating a safe space
Local LGBTQ+ resources to attract like-minded buyers

Showcasing the full value of your home includes sharing what it meant to live there authentically and safely.

Your home, your freedom

The Fourth of July reminds us that freedom isn’t just an abstract idea — it’s lived every day in the spaces where we find comfort, love, and belonging. For the LGBTQ+ community, the right to own and thrive in a home is part of the larger journey toward full equality.

At GayRealEstate.com, we believe every LGBTQ+ person deserves:

A safe place to live
A community that welcomes them
An advocate in the home buying or selling process

Ready to make a move?

Whether you’re dreaming of your first home, upgrading with your partner, or selling a space that helped shape your identity, GayRealEstate.com is your trusted partner. With our nationwide network of gay realtors, lesbian real estate agents, and LGBTQ+ friendly professionals, we make your journey smooth, respectful, and informed.

Visit GayRealEstate.com to:

Search LGBTQ+ friendly homes
Connect with inclusive real estate agents
Access free guides for buyers and sellers
Protect your rights and get expert advice

This Fourth of July, celebrate more than independence — celebrate your freedom to live, love, and own with pride.

Real Estate

How to keep cool during a heat wave

Close blinds, use ceiling fans, and more tips

Published

1 week ago

June 29, 2025

Valerie Blake

It’s hot! Here are some ways to keep cool in a heatwave. (Photo by sonyworld/Bigstock)

Did you melt like the Wicked Witch of the West this week?

As summer temperatures rise, keeping your home or apartment cool during a heat wave can become both a comfort issue and a financial challenge. One of the most effective ways to keep a home cool is to prevent heat from entering in the first place. Sunlight streaming through windows can significantly raise indoor temperatures. Consider the following solutions:

• Close blinds or curtains during the hottest parts of the day. Blackout curtains or thermal drapes can reduce heat gain by up to 30%.

• Install reflective window films to block UV rays and reduce solar heat without sacrificing natural light.

• Use outdoor shading solutions such as awnings (yes, the ones you removed because they were “dated”) and shutters to limit direct sunlight.

Fans are a cost-effective way to circulate air and create a wind-chill effect that makes rooms feel cooler.

• Ceiling fans should rotate counterclockwise in the summer to push cool air down.

• Box fans or oscillating fans can be placed near windows to pull in cooler evening air or push hot air out.

• Create a cross-breeze by opening windows on opposite sides of your home and positioning fans to direct airflow through the space.

• For an extra cooling effect, place a bowl of ice or a frozen water bottle in front of a fan to circulate chilled air.

To optimize natural ventilation, open windows early in the morning or late in the evening when outdoor temperatures drop. This allows cooler air to flow in and helps ventilate heat that built up during the day.

Appliances and electronics generate a surprising amount of heat. To reduce indoor temperatures:

• Avoid using the oven or stove during the day; opt for no-cook meals, microwave cooking, or grilling outside.

• Run heat-producing appliances like dishwashers and clothes dryers in the early morning or late evening.

• Unplug electronics when not in use, as even standby power can add heat to your space.

• Switching to energy-efficient LED lightbulbs can also reduce ambient heat compared to incandescent lighting.

If you do use an air conditioner, maximize its effectiveness by:

• Setting it to a reasonable temperature—around 76–78°F when you’re home and higher when you’re away.

• Cleaning or replacing filters regularly to maintain airflow and efficiency.

• Sealing gaps around doors and windows to prevent cool air from escaping. (Didn’t we all have a parent who said, “Close the door. You’re letting all the cool out?”)

• Using a programmable thermostat to optimize cooling schedules and reduce energy use.

If it is not cost-prohibitive, adding insulation in attics and walls can greatly reduce heat transfer. Solar panels that reflect heat can also help, as well as offset the cost of their installation. Adding weatherstripping around doors and windows, sealing cracks, and using door sweeps can make a significant difference in keeping heat out and cool air in.

Natural and eco-conscious methods can also help cool your home.

• Snake plants, ferns, or rubber trees can improve air quality and slightly cool the air through transpiration.

• White or reflective roof paint can reduce roof temperatures significantly.

• Cooling mats or bedding can make sleeping more comfortable without cranking up the A/C.

For renters or those who can’t make permanent modifications, there are still plenty of ways to keep cool.

• Use portable fans and A/C units instead of built-in systems, making sure they are the correct size for your space.

• Removable window film or static cling tinting can reflect heat without violating your lease.

• Install tension rod curtains or temporary blackout panels instead of hardware-mounted window coverings.

• Add draft blockers and weatherstripping tape that can be applied and removed without damage.

• Cover floors with light-colored rugs to reflect heat rather than absorb it.

• If allowed, use temporary adhesive hooks to hang reflective materials or light-filtering fabrics over windows.

Even if your space is warm, you can still take steps to help your body stay cool.

• Wear light, breathable fabrics like cotton or linen.

• Stay hydrated and avoid caffeine or alcohol during peak heat hours.

• Take cool showers or use damp cloths on your neck and wrists to bring your body temperature down.

Keeping your home or apartment cool in the summer doesn’t have to be expensive or energy-intensive. With a few adjustments such as blocking sunlight, optimizing airflow, using fans effectively, and making renter-friendly upgrades, you can create a more comfortable indoor environment while keeping energy bills in check.

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH @properties. Call or text her at 202-246-8602, email her at DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs.

Real Estate

The world’s on fire and D.C. is on sale (sort of)

Prices are up, but then again, nothing makes sense anymore

Published

2 weeks ago

June 22, 2025

David Bediz

The housing market remains strong in D.C., especially in upper Northwest. (Photo by Stbaus7/Bigstock)

ICE is disappearing people, revered government agencies are shuttering, and who knows if we’ll be in World War III next week? But can you believe prices in D.C. are actually still up 6.3% since last year? It doesn’t make sense, and perhaps that does make sense, because nothing seems to make any sense any more.

That said, there are some parts of our market that are truly suffering. The interest rates, which have been up, up, up for about four years now, are the ongoing rain on our market’s military parade. Combine that with 75,000 federal employees taking a buyout nationwide, and DOGE cuts eliminating around 40,000 federal jobs in the District (per estimates by the D.C. CFO), not to mention thousands of other job losses in non-governmental organizations due to funding and program cuts, and you’ve got a case of uncertainty, and downright unaffordability in the pool of otherwise would-be buyers.

This has had a marked impact on properties that starter-home buyers and low- to mid-level employees would otherwise buy, most notably condominium and cooperative apartment units. These properties have already slowed in our market thanks to the profound impact that higher interest rates have had on their monthly carrying costs—pair that with job insecurity, and a lot of condos are proving to be very difficult to sell indeed.

So how is the average sale price up in our market?

The increase is almost entirely due to the resounding strength of the single-family home market, especially in upper Northwest D.C., where it is still quite common to see bidding wars, even on properties pushing past the $3M mark. It seems that buyers in that echelon are less impacted by a few percentage points in the interest rate, and less concerned about their job security. Notably, those buyers are often married with children and have an absolute need for more space, must stay in the area due to one spouse’s job, or the kid’s friend group, regardless of whether the cost of owning is thousands of dollars more per month than it would have been in 2020 or 2021. The continued appreciation in these neighborhoods defies imagination.

So, what to do if you are not one of those lucky enough to be shopping for a $3M home? The short answer: wait. If you want more space, rent your current place out and learn the joys of being a landlord while someone else pays your mortgage. Need the equity from your current home to buy your next place? Get a home equity line of credit, or loan, and pull the equity out of your current place to buy the next one. Or—and I have never recommended this before in 21 years of being a Realtor—rent for a few years. Sure, I’d love to list and sell your condo so you can climb the real estate ladder, but it might just be a waste of time, money or both if you could just ride out this storm and sell in a DOGE-less future.

All this said, there are some condos that seem to be immune from this recent negative news. Anecdotally, it feels like it’s the truly special ones that do just fine no matter the market. Our recent listing in Capitol Hill had a view from every one of its 15 windows of the Supreme Court. Sold in five days with six offers. Another condo was on the top two floors of a townhouse and had the coolest black wood floors that gleamed like a grand piano. Sold in four days at full price.

So, all is not for naught if you have a condo or home in an area that people want to be in, with nice space, light, amenities and a certain je ne sais quois. And, as long as we have a democracy in a few years, my experience says our market will be back, stronger than ever, really soon.

David Bediz is a Realtor and mortgage loan broker for the Bediz Group LLC and Home Starts Here, LLC. Reach him at [email protected].