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I currently own a home and have it on the market for $95k. I owe about $98k currently so yes, I will be taking a loss which is not ideal but I don’t care as long as I get out of this house and can move on. It has been on the market for almost 3 months. Basically the only thing that is selling in my subdivision this year has been foreclosures. And they are selling between $65k - $75k. There are 3 other homes currently for sale in my subdivision (not foreclosures) and they are all $115k - $117k. I want to sell my home and move to a better area – trading up. I already have a new subdivision picked out so all I’m waiting for is to sell my house. (I am using a realtor) Any suggestions on how I can get rid of my current house so I can move on to my new home? Just looking for some opinions and perhaps there is an idea I am missing. Thanks.

Short sale.

Contact your lender and apply. You will have to qualify hardship. Hardship in the respect that you do not have the money to pay the difference in what you owe and the current comps. The Realtor can assist in helping you get the proper paperwork/docs together to submit to your mortgagee. You will have to provide bank statements.

Has your Realtor discussed this with you?

A Realtor listing the home as a "short sale" on MLS at comp prices does not guarantee success of the short sale process, without approval of the lender.
Along with the docs that you provide to the lender, your Realtor can include comps. Your lender will, if you qualify, conduct their own outside BPO/Broker price opinion.

A statemnet of... moving up to a better area to your lender.. may be to your detriment.

Is renting out the property not an option to help save credit?

This message has been edited. Last edited by: real estate lady,

Sorry - I did not explain well. I have no hardship at all. Short sale is not an option I am even considering. In fact my salary is high enough to make both mortgages if necessary. I also have enough in savings to make the mortgage on my current home for a couple of years. I could rent it out but honestly at this point I wouldn't feel comfortable renting it out for fear of damages being done. (Based on rentals in the subdivision I would be able to get enough in rent to cover the mortgage + taxes/insurance.)

There is absolutely no reason for me to pay $90-95K for your house when I can buy one similar in the area for $65-75K. Foreclosure? Doesn't matter to the buyer? You're underwater? Doesn't matter to the buyer. Either show the buyer your house is worth thirty thousand more than the one around the corner or develop another plan. It looks like that means staying put for a few years or renting it out with all the aggravation that may come from that. Not a great situation, but at least you're not in the position where you MUST move.

The reason I posting here is because I am looking for good alternatives to get out of my current home. No - I am not willing to just walk away from my home because I have decided I don't like it anymore and can't sell it. That is what others in the subdivision are doing - I know some of them. So my purpose of posting here is to brainstorm with others for suggestions that perhaps I have not thought of. Waiting it out doesn't seem like an option to me because who knows if the values will ever increase.
For example, if I knew that the prices would rebound in a year (no crystal ball I know) then it would be easy. I would just pay two mortgages for a year and then sell and move on. Buy the new house now.

This message has been edited. Last edited by: kari2011,

..and that's exactly what we are doing...brainstorming.

My vote is to rent it out for now. May sure you pull tenant's credit and get references. A realtor can assist with listing your home as a rental on MLS.

Be careful on your decision to take pets.."can" destroy a house.

This message has been edited. Last edited by: real estate lady,

Thanks. Appreciate the responses. Some options I am tossing around are:

Renting it out - using management company

Leave it empty - uses up some savings but don't have to worry about damage from tenants.

Use savings (or possibly get loan) to pay existing mortgage down to level of foreclosures in the subdivision. The houses recently on the market in my subdivision are selling at ~$65k within about 2 weeks.

Stay put for several years until the market rebounds.

???? Other options I haven't thought of yet?

stay put is the smartest.

Well as depressing that is I guess I will stay in this house until I die. I will just take my extra money and stay at a hotel in a better area all the time. Thanks for all of the responses.

A depressed market shouldn't depress you as long as you have a roof over your head and payments are affordable. Timing is off - that's all. Wait for a better market or rent to a viable tenant..until that time comes.

Consider those who must short sale because they are unemployed and have to move to another city for a secure job. You say you have a great job, so you are a lucky soul. It is an iffie world today, that is all I am saying, and staying put for a while is safe and a chance to redeem your equity.

As for taking and I quote "your extra money and staying in a hotel all the time", why donate
a bit of it to a homeless shelter. Help others, instead of feeling sorry for yourself.

This message has been edited. Last edited by: real estate lady,

But the thought of staying in this area for 10 more years waiting on the market to recover is ridiculous. As bad as I would hate to ruin my credit I would prefer to just let it foreclose on and rent a place in a better area. Why not? That's what all of my neighbors are doing.

Who said "10 years", and why ruin your credit.

Go get a tenant - print flyers..offer a little less than market rent.. take flyers to locals schools, businesses, stores..the butcher, the baker, the candlestick maker.

Require prospective tenants to bring you a current credit report and fill out an application...review each..then make a decision.

On the sales front --Talk with your Realtor .. not sure if you have one. She/he knows your market and can find TRUE comps. Not sure where your comp figures came from. Is there anything special about your home that would warrant higher value...new kitchen..bigger lot...garage. Get down to the nitty gritty on up-to-date comps.

In other words schedule a listing appointment..to find out "for real" where you stand. You are not compelled to list.

Another alternative is to possibly and I am racking my brain here for you..is "Lease purchase" at a price higher than market with non-refundable $5,000 "down payment" deposit with the deposit issued to you, not escrowed. State "no security deposit"(which would have to be escrowed). Make the lease period 3 to 5 years , at which time they must purchase and secure a loan to buy. State in the lease purchase document that the Realtor will be paid at closing. If that doesn't fly, you can possibly pay her part out of the non-refundable deposit. This is creative financingand a Realtor or Attorney can help you fine tune this
type of selling technique.

Check your state laws through a Realtor or Attorney to see if this action style is possible in your state.

This message has been edited. Last edited by: real estate lady,

It could very well be 10 years before my house comes back to the value I paid for it since everyone in my subdivision is walking away from their houses. I honestly don't think I would have a problem renting it out based on what the other homes are renting for in the area. Of course I would just prefer getting rid of it.
I still have a few months left on my contract with this realtor. She hasn't done anything. She will just send me a list of the foreclosures that have sold in the past month. I believe that she thinks it will never sell so why waste her time.

call a face to face meeting with your Realtor and share your feelings.

kari2011, I had to read through the posts on this thread several times to convince myself that your inquiry was really serious - someone who has the financial ability to pay their legally contracted obligations BUT now wants out because you have decided you would rather move out and up...

What are things coming to?

Okay, I am persuaded that you are being serious so I will be as well. You want brain-storming? Here's an idea - donate your residence to a qualified tax exempt organization - you get the deduction and can then move on. Be sure to consult with a well-qualified CPA before taking a step in this direction!

BTW, wlecome to the Boards!

Well, would you be willing to drop the price a bit and just lose the difference?

IR, how would the donation thing work? Would she still owe the 98K if she donated the property?

Kind of like that renting out option.

The mortgagor is still responsible for the loan.Cannot transfer title without payoff, unless lender will allow new buyer to qualify to assume loan. Are they willing to adjust interest rate lower? Modify mortgage amount?
Call them, I would suggest, and ask what they are willing to do to help you sell your home.

If lenders do not want a bank of inventory, the key is to work with sellers(mortgagors) for solutions. That is a general statement, not referring to your situation.


Lenders, in my opinion, don't want the house back, for it to sit and fall into disrepair

This message has been edited. Last edited by: real estate lady,

REL gave a couple of good options for your situation.

Renting - If you use a professional property management company to handle your property they will screen the tenants for both credit and criminal histories. They also will require all adults living there to be on the lease agreement. Interview several management companies and look at the properties they manage. Even if you can't go inside you can tell a lot from the exteriors.

Lease purchase - This is a good option for people who cannot quite qualify for a traditional mortgage. As REL mentioned - make it a non-refundable payment if they are not able to convert to purchase within the option period.

I think your best option is to rent it for 3 - 5 years. That will give the housing market time to stabilize and hopefully get you out from under on your mortgage so when you do go to sell you will be in a better position.

Please!!!!! don't be so pessimistic as to the Real Estate recovery. It may not be back to 2007 levels, but is will recover some. There was a lot of inflated prices during those years, now, homes are selling at more reasonable prices.
Probably rent, is the best option for you, you can still move and have that house as an income property if you need it in your future.

Thanks for all of the responses. Yes - I need to discuss my options with people. (By the way if there is a type of professional I could discuss this with I would be willing - accountant, financial advisor, etc. I am just not sure who this would be.)
Yes - I would be willing to drop the price and lose the difference. I had thought about that. (Again just thinking out loud here.) I could take $15k out of savings and take out a $15k-$20k loan and use that money to drop the price down to foreclosure pricing. The homes at these prices in my subdivision are selling within a month. But should I take that money and pay down the principal of my mortgage or just bring that money to closing? I also wondered about whether I should use a realtor if I did drop the price like that? If I drop the price so much is there any reason to spend that money on a realtor? Or is this entire idea insane?
Regarding the renting option - I have thought of this heavily also. Renting it out on a year by year basis and just seeing where the market is at that time and decide whether to rent it out for another year or try to sell. (I would use a property mgt company.) Whenever I mention the idea of renting out my place my friends look at me with this blank stare like it is a terrible idea. None of them seem to think it is a good idea which makes me second guess that idea as well.
This is why I am turning to this board. And I appreciate everyone listening to my venting.

Another option is a Land Contract/Seller financing with a sizable downpayment. You would need to check your state laws and your note but it is being done with considerable success here.
Some buyers who for whatever reason don't qualify for a loan are willing to pay a premium to be able to purchase a home.

I wouldn't let the blank stare of my friends deter you. :-) Look into renting it out, see if you get interested renters. Rent to own, too. Maybe use the money in your savings to purchase your new house. Reevaluate after a year as to whether to keep the original house or sell it.

"Rent to own" - are you referring to a lease purchase? I have slightly considered this as well. Which is better? Rent it out or lease purchase? There was one person interested in a lease purchase - but the reason they wanted a lease purchase was because they had a bankruptcy. Not sure this is such a good idea.

A CPA is best qualified to answer your questions. If you were to rent the house out for a number of years (three maybe) it would be considered an investment property. When sold, the loss in value of an investment property may sometimes be used to offset other taxable gains and reduce your tax liability. This can sometimes be spread over a number of years. Yes, you may still lose money selling vs. what you paid but the tax savings (combined with the rental income) may negate the investment loss. This could be combined with a lease purchase option but, again, these are only ideas here and your individual situation must be examined by a CPA to see if it is a viable option for you.

There really are only two choices that you are going to be comfortable with - lower the price to sell or stay put.

I don't know how old you are but since your income is high enough to carry two mortgages, I would take the loss and move on and then start saving money as a way to recoup your loss.

As it is, and an accountant can help you with the numbers and how the deductions work, but why would you want to give away over $15,000 in savings that you will never ever recoup?

If you keep it as an investment property the tax basis changes - many of your expenses for the property should become deductions and in the future if you have to sell you are not selling a primary residence but an investment which changes the status of any loss or gain.

Very important considerations and only a real tax pro can help you with.

This message has been edited. Last edited by: Charming,

I would be willing to give away over $15,000 in savings in order to get rid of this house forever and move on. IF we make an assumption that the market will slowly and eventually recover and assume that it recovers at about 10% per year it will take nearly 5 years to get back to what my current balance is. Yes - I will be making mortgage payments over these 5 years but the principal reduction is not much each month. And I am not even sure that this particular area will ever recover. Other nearby areas are selling fine. This area is not. It is plagued with foreclosures and short sales.

In addition to talking to your accountant, talk to a real estate professional about the market where your house is located. What is the condition of the neighborhood. Are people buying the foreclosures to live in or rent out? Also talk to a propety manager about what kind of rent you can expect.

You will still be making mortgage payments, but you will also have new tax deductions.

If you go on the market now competing against foreclosures then you could potentially lose even more.

When you have all the information you need to make an informed decision, then move on it. I don't mean this as nasty, but if your friends are not real estate investors, realtors or accountants, I would not give their opinions too much weight. They are there to support you in the decision you do make.

Don't expect a 10% increase in value anywhere for a number of years. We are still heading for the bottom and there is probably a great deal of backed up foreclosure inventory to be moved that has not hit the market. The good news is that in some areas the number of homeowners being delinquent in their mortgages has gone down.

It is a hard decision to make but take your time and make sure you make an informed decision.

This message has been edited. Last edited by: Charming,

In my opinion you have gotten too emotional over all of this, not that I blame you, I would probably do the same.
But, I think that you better sit down with professionals, like some posters have advised. You need a cool head to show you the different options that you have.
don't throw the baby with the bassinet.

I think the reason your friends may be discouraging rental is because..it is a known fact that problem tenants are usually a result of not qualifying the tenant to begin with... in regards to pulling their credit and checking references.

Mainly because Landlords, who are not professionally involved in the real estate business, do not know how to access this information. The ideal solution is to have the tenant pull their own credit report and bring it to you.

I think rental is your best solution. You can ask for a two or three year rental, even, and give a little reduction in rental as an incentive. Ask your Realtor to convert your listing to a "rental". Would probably require
new paperwork. Doesn't have to include monthly collection - have the tenant mail their check to you.

However..I want..I want.. I want... a new house.. is the big message here we are hearing..SSSSOOOOOOOOOO


Use only part of your savings to buy your new house because it is obvious here you are not going to be happy until you do. Talk to your Realtor about this... Have the seller pay your closing costs, and buy FHA 3.5 percent down. That is minimal outlay of funds OR..If you go outside of the USDA boundary (U.S. Dept. of Agricultural) you can do a 100% loan (still have the seller pay your closing closing)..probably total investment $1,000.. Call local lenders, and one of them will have a map they can print off for you of your county.

These options will allow you to keep more in your savings for a rainy day, rent out you existing house to cover payments and to recoup hopefully one day equity and get you happy by moving into a new house.


Whew Kari - you wear me out!!

This message has been edited. Last edited by: real estate lady,