Im taking a loss on a condo or should I? Closing costs rob me.?

Question

I can barely afford my mortgage but I still have have enough money saved for about 6 months. I love the condo but got terrible mortgage terms---Interest only payments. I bought condo for 100k and selling for 110k. Paid $7885 in closing costs. HUGE MISTAKE. Century 21 is selling property for me because I cant sell it! I tryed "selling by owner" but having no luck. The closing costs comes to $8775 but I dont have to pay a dime of it. The agents will just take it off my profit. Which will leave me with about $1200 in my pocket. I will take about a $6885 loss on the condo from closing costs. I also bought condo through a developer--I, the seller, was responsible for closing costs as well. Total ripoff. Should I take condo off market and hope real estate rises and try to make a profit? But how do I avoid Century 21's cancellation fee of $995 if I do?
Or should I sell it and get out from underneath these high "interest only payments?" I have 6 months worth of money left in savings. help!

Answer 1

I would not pay that closing costs!!
that's like saying you are giving the buyer 8775 bucks .
if i wanted to sell that fast I may pay some of the closing but not all .
And i bet you came down on the price?
Don't do it ........thy know( C21) you need to sell thy just want there part $$$ .
so may be pay a % but not all.
me as a buyer that be one hell of a sweet deal ,wish i found that.

Answer 2

I am confused, are you out of work or just facing a budget shortfall each month?
First thing, all the mistakes made in the past are sunk costs, ie water under the bridge. It does not matter if you paid $8 of closing costs or $8000.
I will cut to the end of your question. If you can only make payments for six months, that is not enough time for the real estate market to turn around. Actually prices could go down more in those 6 months or mortgage rates could rise to 7.50% and further slow down sales.

It is a good lesson for anyone buying a property. You have to comparision shop and negotiate for each item, purchase price, closing costs, loan fees, loan rate, realtor fees, etc.

If you are saying you might not be able to make payments in six months, get out now. I think you would incurr the same fees. I think you may be confusing realtor fees for closing costs. On a $110k sale realtor fees of 7% should be around $8000.

The closing costs are what the buyer will pay when getting the title work done. You have nothing to do with that.

Good luck

Answer 3

Glad to see you have enough money saved to stay the course for a while. Buying from a developer AND paying high closing costs was indeed a big mistake.

An interest only payment is the cheapest payment you can make (short of making a payment that doesn't even cover the interest owed - aka negative amortization). I'm assuming you got at or near 100% financing, which may have driven your rate up - but the fact of the matter is you are having trouble making payments. If you can do something like get a roommate or otherwise make some additional money to stay in the condo, it MAY be worth it. Contrary to the past 3-5 years, most real estate success was and is made over a long period of time. Good for you if you make money faster than that, but historically speaking money in real estate is made over the long haul.

If you cannot afford the payments and cannot come up with another solution (roommate, refinance, extra job) to comfortably deal with that - get it on the market as soon as possible.

Best of luck!

Joe...

Answer 4

The mortgage payments you can afford are based approximately on 1/3rd of your gross income. If you overstated your income on your loan application, then I can understand why you feel your mortgage payment is high even though interest only loans actually have some of the lowest payments available. If you've never had a mortgage before, it may feel like you're paying a lot compared to rent, which is usually lower. And you really shouldn't be living off of your six months worth of savings - those are considered your "reserves". You should have a job of some sort with regular paychecks to support your mortgage and your household. Did you try talking to your mortgage company or servicer about the rate & terms of your note? They might be able to give you some more options to dealing with your loan payments. You'll want to make that phone call now to preserve your credit incase you're not able to pay those payments later down the line.

Answer 5

i am a real estate broker. It depends in your location? I am in MA if the condo was in MA get out if you can. The market is going down for the next couple years. A small profit is better than no profit. Just for the future dont sign with a fee if you cancel. I If you can provide your area I can give you more advice hope this helps a little.I would never do an interest loan. very risky.... best of luck