Options for getting out of a house in a slow market?

Question

Our house has been on the market for a year now, we have listed it with two different realtors during that time and only had two showings. We want to move closer to Indianapolis, We have found 3 houses we really like and would like to buy one of them. The listing is up in a couple of days on this house and I'm wodering what the best option is going forward.

The economy in my area is very very slow (highest unemployment in the state), and there are many many houses for sale, very few are selling, and when they do sell, they are being sold for ~<90% of value. We have already dropped the price ~7% and offering to pay closing costs, and still nothing.

Which option is best for me?

1. Relist it with the same realty office
2. Try to sell it myself (FSBO and drop the price by the 7%)
3. Try one of those we buy your house today places (may not cover the payoff)
4. Move and try to rent the place
5. Move and let it go back to the bank

Answer 1

1) The value of the property is what you can get someone to pay. Period. You are saying that your market is overpriced. If you're only going to get $X anyway, try making that (or something closer to that) your asking price. It works!

2) I don't think much of your realtors if they didn't explain this to you. Find a different listing agent. But if you want to sell, you want a full service listing agent, especially in the kind of market you describe.

3) If selling for a real price isn't on the list of options, then see if you can rent for enough to cover the mortgage. Your market will come back sometime. But being a landlord opens up a whole new can of worms. Talk to a good management company, especially since you're not going to be in the neighborhood any longer

4) "letting it go back to the bank" will hurt you financially for a very long time. To start with, you won't be able to get a loan to buy that replacement property. Don't do it.

Answer 2

Option 5 is definitely out. If you let it go back to the bank, that will cause significant damage to your credit and will make it very difficult to obtain home financing (or any other financing for that matter) for the next 3 years. Yes, you'll be able to obtain financing, but it will be at a very high interest rate because lenders do not like the risk of lending to someone who has a recent foreclosure. I would try the FSBO option. There are websites out there where you can pay a fee and they will provide marketing for you at a significantly lower price than a realtor would charge. Also, is it a necessity that you move, or do you just have the itch for something new? If it isn't necessary, stay in your home for another year or two until things turn around. That way you won't take as much of a loss on the house. While it is exciting to get something new, sometimes it just doesn't make good financial sense.

Answer 3

Auctions have become a viable option for many people that have been unable to sell. Just make sure you find a reputable auction company to help you, and try to get a reserve price on the auction. While I would not recommend trying to sell on your own, as this can be a big hassle if you don't know what you are doing, you might have more luck offering a higher commission to any Realtor who brings you a buyer. You probably had your home listed for 6%, 3 for your listing agent and 3 for the buyer's agent. If you offer 4 or even 5% to a buyer's agent, you will have more traffic from Realtors wanting to bring their clients.

David Enriquez
www.perfecthomesonline.net

Answer 4

Try a different realty office
Selling yourself is more hassle than its worth and can have problems.
Don't go to one of those we buy your house places they just want to flip the houses and will not pay you anywhere near what you want.
Renting is a good option as long as you can afford to keep a little money in the bank to fix it up if the people wreck it when they move.
Don't ever let it go back to the bank..This will hurt your future of buying another house. Your credit will be bad for years and they will still come after you. Way to much headaches. Stick it out. Your credit is very important don't screw it up. good Luck.

Answer 5

Cast a wider net! You can advertise it yourself (get a lawyer to actually close the deal), but go nationwide. Use the internet.

You say the economy in your area is slow (high unemployment), but there are a slew of people who do not need to "work" (retirees and such), and there are a bunch more of them everyday. Many are looking for a nice place to live with relative low costs. Does your area fit that? It is okay to "puff" a little.

Rent-with-option-to-buy can be real draw, but does require management and risk.

The point is -- the realtors have done nothing for you, so take care of it yourself. Just like a lot of things in life. Good Luck.

Answer 6

Yes, it is a bad time to be selling. Dont let it go back to the bank - that's not good for your credit. Dont buy another house until you have sold yours. Just wait I say. You could try and rent but are you prepared for being a landlord? I hear house auctions are new - do you feel your house is wants someone wants? Are other homes similar to yours priced liked yours.

Answer 7

That's the rock and the hard place theory. Assuming the lender you currently have on your home is aware of the slow market in your area and the possibility of getting your home back because of it. You might want to approach them and ask for permission to sell your home as a seller financing sale in where you grant the terms and the instruments to the buyer this would avoid the due on sale clause. This would allow you to ask for a much lower downpayment on the home assuring you a larger market base.

Answer 8

I would go with the 2nd option. Also, make sure your house has curb appeal. A fresh coat of paint and some inexpensive landscaping can do wonders.