How to STOP Calgary Foreclosure
with these 3 Steps!

What do you think will happen to the number of Foreclosures in Calgary in 2008?

What will be the % increase in Calgary Foreclosures this year?

My prediction- about a 30% increase (waiting for the 2007 stats). If you know the number of foreclosures in 2007, shoot me an email so I can post it right away.

This is what I see happening in Canada (looks a little to close to what happened in the US last year);

"100% Financing, $0 down and we'll pay the closing costs"!

"Stop renting and own your own house today, with no money down."

"40 Amortizations we can qualify anyone with a job"!

These are some of the phrases I've heard bankers and mortgage brokers use to sell high priced houses to first-time home buyers. If you have heard the sales pitch, then you know exactly what I mean.

My problem with these sales tactics: If you are unable to save enough for a down payment, chances are you may be living paycheck to paycheck.

So when something unforeseen happens (and they are always when you least expect it) you are unable to pay the mortgage.

I figure if bankers where really interested in your well being they would limit your risk and advise you to buy a house on a rent-to-own or an assumable. At least if you default on a rent-to-own or assumable you lose your deposit. That is a whole other topic not to be discussed here.

How do you deal with a Foreclosure?

It is the type of situation that you can only appreciate if you have ever been through it. I won't lie and tell you that I've been in foreclosure. I have had a house that was on its way, but I avoided it. Here are 3 steps I used to prevent the process from escalating past pre-foreclosure.

Lesson 1

Be honest with yourself.

Know where you are and if your situation is spiraling out of control. If you are in pre-foreclosure, you still have options if you act quickly.

There is no sense hiding it from your spouse or family (even though it is embarrassing). If you think pre-foreclosure is embarrassing, just think what it will be like when the bank takes your house and you still have equity in it. Leaving money in your house because you where to ashamed to act quickly will make you look even worse.

My Suggestion :

Phone up your bank and ask for a meeting. This will show them you are you aware of the situation and are prepared to deal with it. Making the appointment is something that very few individuals in pre-foreclosure do and will go along way in helping you work through it.

Banks use real people to deal with you (not a friggen computer) - so when you go in and sit down with a representative at the bank, be as polite as possible. The banker will have much more sympathy for you if you are courtesies.

They really will work with you. If the first person doesn't, then go to anther banking official, it is up to you to deal with this head on, so don't be shy.

Believe me, banks are not in the business of foreclosing. They lose just as much money foreclosing, as you will!

Lesson 2

Make a plan and stick with it. What do I mean by that?

If you can't afford the mortgage and you need out- then SELL! If you wait too long and the bank knocks on your door one day, because you procrastinated- you'll have no one to blame but yourself.

If your house is run down and needs some work- fix it and clean it! Other wise you will end up selling your house to an investor that will do that work for you.

I know this, because I am an investor/Realtor that helps people in foreclosure situations in Calgary, Alberta. The houses I sell usually need a lot of work and the home owner was not willing to do it.

There are many situations where I see people that need to sell immediately, and do not have the means or time to make their house presentable. If the house doesn't look good, then it sits on the market, while clean homes sell.

Lesson 3

Sell Your Home, Yourself or with a Realtor

Here are the steps I use when I am selling a house:

-Do some research and get a good idea what your house is worth.

Look at comparable sales from neighboring homes and determine what your house should sell for. Then get an impartial opinion from an expert- a realtor or appraiser. If you live in Calgary I'll give a free, no obligation estimate of what your house is worth.

Clean your house- and I mean really clean it, fix walls and paint if necessary, spruce up the front of the house (first impressions are critical).

If you plan to sell really fast and on your own- price your house a good 5-8% below market value.

By doing this you attract a ton of interest and stand to get as close to market as possible. If the offers are too low- you do not need to accept them.

If you do get an offer that is below market value but still reasonable- take it. Think about it these two ways- if you use a Realtor it will cost you on a typical $350,000 Calgary house, about $14,500 + GST ($15,370), which is about 4.4% of the value of your house.

So even if you sell for 5-8% below market value quickly, you may still come out better off than using a Realtor.

There are times when using a Realtor to sell or investors to buy are beneficial.

Should You use a Realtor to Sell?

1) The best Realtor's understand marketing. They will price your house appropriately to ensure you get the maximum exposure to potential buyers.

Realtor's also have access to MLX (the public version is MLS). This is where Realtor's go to search out specific homes, with the exact criteria they are looking for.

MLS is ok, but if you've ever seen MLX- you'd understand why all Realtor's use it and why maybe 10% of Realtor's will ever go to We List.

If you are looking to sell quickly, you should keep in mind that you need to get in front of the maximum amount of buyers as possible. One of the advantages Realtors have- is MLX (or ML- exchange)

2) The second advantage Realtor's have- Experience in the industry. The best Realtor's will know how to negotiate, sign contracts, handle lawyers, mortgage brokers, eliminate tire kickers, and deal with complex land title issues.

I should say that not all Realtor's are the same. I'm sure you've ran into a friend or acquaintance that told you they just started selling houses. I would be cautious to use someone that is too new.

Real Estate is not rocket science, but there are some critical things that need to be addressed- and if your Realtor is unaware of them, you can end up losing alota cash.

If you live in Calgary and need an estimate of what your house is worth, call me at (403) 214-1884 (I return calls within 3 business hours) or contact me using the form below.

Good Luck!

Shane Melanson

1800-931-7497 24 hours, for FREE recorded message
1st Avenue NECalgary, AB
T2E 9C6