If for one reason or another you own a house that is not worth what you owe
on it, it could be difficult to come to a solution to move or sell the property.
Even if your in a financially strong situation it can be very tough to know how to sell a house when its worth less then what you owe.
We have some tips regarding how to sell a house during times like these.
Before considering the options below, all parties should create budgets and
know what is feasible and also what their short term and long term goals are.
Having this information will (hopefully) help you come to a decision
regarding your options. Here are a few possible solutions regarding houses
worth less than is owed:
You or someone else in your family keeps the house.
You can keep the house subject to the negative
equity, with the understanding that there shall be some offset and
consideration given in trading this negative asset for other property. The
housing market is subject to change. If one person can afford to remain in the
house, it is possible to rebuild equity.
Walk Away From House
A second option is when the encumbrance is too large and the payments are
overly burdensome, some people will just agree to walk away from the home.
In some cases, one party will stay in the house, without making any payments on the mortgage, until the home is actually foreclosed upon and then there is a sheriff’s sale, which can take many, many months. This can be very bad for your credit.
Short Sale or Sell to Investor
A third option is to try to sell the home, and work out a short sale with the
bank or sell the house to an investor. This can happen in some situations, but
bear in mind that if it is not handled properly, it can negatively impact your
credit.
Even in situations where there is equity in the home, do not become overly
enamored with your property. Sometimes it makes sense to try to sell the
house. Every situation should be handled on a case-by-case basis, bearing in
mind that your situation is not the same as your friend or neighbor’s.
Even if you can afford the house, if it is going to take too much of your income to
keep the house, it may be better to sell it.
If you have questions about selling to an investor, or about purchasing an
unwanted property, contact us for more information.
If you need help getting information ready in order to decide what to do with
your house call us for more information. (804) 293-0208