Great Advice

On this post, we revisit long time real estate lender/mortgage consultant, Ben Cotton. About one year ago, Mr. Cotton sat down with me to discuss the Orange County real estate market. It was then that Mr. Cotton looked into the future to see were the O.C. would be as it pertains to the real estate market. As it turns out, he was not far off the mark at all. Today we will see what Mr. Cotton’s thoughts are to navigate through the market, retain what property you do have and plan a possible exit strategy if need be.

Brian J. Murphy: Thanks for joining us once again, I know that market has been a little shaky for you, but through your previous and wise real estate decisions you have been able to keep your head above water. What can you recommend for those that have fond themselves in a tight real estate bind, such as a foreclosure?

B.C: Go ahead and walk away if you can’t pay for it. If you can’t get out of the hole, walk away. You will take a credit hit either way you look at it, if you are in the situation and you have exhausted all your options, there is no getting around it.

B.J.M: For people that would like to unload a property that they can’t afford, what do you suggest their first course of action be?

B.C: Try to rent it out, if you can’t rent it, you should be able to, but if you can, renting it can buy you some time. You may want to consider a Deed in Lieu Of. Which is basically giving your house back to the bank. It is like you volunteer to give your house back to the bank. You will still take a hit on your credit report.

B.J.M: We are now considered to be in what people are calling a buyer’s market. While there is some obvious truth to that do you see any immediate danger for people looking to buy now?

B.C: No, not at all. I think that it’s a great time. If you are going to do it, do it now. There is going to be a short window and once it is closed, that is going to be it. I would say you have around two years to take advantage of this situation we are in now.    

B.J.M: How do you think that Orange County is dealing with the real estate crisis compared to the rest of the country?

B.C: Like everyone else really, taking it in stride. The only difference is that the houses are higher and depending on the area, less foreclosures. But only depending on the area, for the most part the O.C. is a declining market, the whole state is for that matter.

B.J.M: In closing, we know that real estate is cyclical, so when do you think that the tide will change for what we are experiencing?

B.C: Within the next five years for sure. The way things are now is sure to change. Again, my suggestion is to take advantage of it now while things are still affordable.

  • Ellie at Redfin

    Great advice, thanks for the interview Brian.

  • Brian Murphy

    Thanks Ellie, I appreciate the compliment.