Negotiate Like Crazy


negotiate man
Image: Daniel Root

Owners: Steve Cameron and Tania Rain
Occupation: Steve, sales manager for a wireless provider; Tania, marketing director
Location: Hi-West Estates, Tualatin
The property: 2,100 square feet, three bedrooms, two baths; built in 1977
Date purchased: 2006 price $335,000
Current estimated value: $280,000

The neighborhood Roomy homes sit on wide streets leading to the boutiques of Bridgeport Village. Cameron and Rain live on a corner lot, near Tualatin Elementary School.

Market watch Current median home prices are down by nearly 5 percent since 2007. Seven percent of homes are now bank owned or in foreclosure.

Why they bought Tania Rain has a sixteen-year-old; Cameron has two children, ages ten and twelve. When they decided to merge their households, they were drawn to the home’s spacious feel and its location less than a mile from Tualatin High School.

The dilemma Before purchasing the Tualatin home, Cameron told himself that a $2,000 mortgage was the most he could afford. But after qualifying for a subprime loan, he thought he could stretch his money to pay for a $2,500 mortgage. “It was like I had blinders on,” he says. “I wish someone had said ‘Steve, you can’t afford this!’ Shortly after the purchase, the family had trouble selling Rain’s home (a nearby condo), and Cameron suffered a pay cut. As a result, the couple began struggling to make their mortgage payment. In order to keep the family’s home, Cameron has discussed loan modification with his lender and is considering filing for bankruptcy. “It makes me feel like I stole all this stuff,” he says.

Expert eye Lenders don’t want another foreclosure on their books, so keep negotiating, says Mark Minnis, an InSight Real Estate broker/owner with more than twenty-five years’ experience. “In the meantime, meet with a [certified public accountant] for a long-term financial plan, and with an attorney for legal counsel on both bankruptcy and loan modification, for a better rate,” he adds.

Expert eye If a homeowner can prove insolvency, the lender may allow a short sale, which involves selling the house for less than the total amount due, says Austin Sabin, an agent with Haskins Realty Group. These deals may require the seller to pay back a portion of the shortfall, but they affect credit scores less than bankruptcy or foreclosure do. But beware: the IRS will consider the unpaid debt taxable income—even if the bank forgives the debt. Sabin highly recommends consulting both a certified public accountant and a lawyer before choosing this option.—AS