Real estate help please..?

Question

Ok, here's the deal. I am currently in a home that has been on the market for 6 months. The market is very slow, and it looks like I am at a dead end.

I plan to stay in my next home for the rest of my life. So I don't need to worry about getting financed for another home. I am thinking about ditching the one I am in and moving to our new home.

I need to be able to be approved for a few loans. One being my daughter's braces in a year or two, the other would be for sending my three girls to college.

Finally, my question is, is this a good idea? Would I be able to get the loans I need in the future if I kept my credit up with on time payments? Or will I screw it up for my child's education in the future?

I know the bank would at least be able to get the amount owed. Thanks for your time, this is becoming a stressful mind boggle! :)

Just want to add after reading the answer given... My real estate agent said it's no big deal.. it would be wiped out in 2 years, and I could get into another loan for a house if I needed to...

I am not in a financial bind. I just need to get out of this small house before school starts.

Answer 1

Don't panic... take a deep breath... Think through some of your options. Sounds like you may have some alternatives.

Although the market is currently soft, making it more challenging to sell a property, at the same time the rental market is strong in some areas.

If you are located in a good area for rentals, hire a reputable property manager to rent your home to a good tenant. Offer the tenant an option (separate contract) to buy the property.

In this market, an option for a tenant to buy a home may be a very attractive way to get your house sold without additional stress to yourself. If the tenant chooses the option to purchase your home and the contract contains language that the tenant (not you) will be responsible for all utilities and maintenance items, you don't get called in the middle of the night for repairs, etc.

Even in soft markets, sellers and buyers (tenants that are potential buyers) can negotiate terms that are beneficial to each other.

Finally... yes you will damage your credit if you just walk away because, as a homeowner, you are responsible for making mortgage payments based upon the terms of your contract.

If you would like assistance, feel free to contact me.

Best of success.

Answer 2

Unfortunately, you are not alone in this situation. Literally thousands of people are in the same boat. The challenge you face is how you handle it.

That depends on several things. First, have you reached the point where you are breaking even selling the home. In other words, you can't go any lower without having to pay money on your house when it closes?

I am going to assume this is the case since you want to leave to your new home. Unfortunately, you are semi-stuck. I would suggest you put out the lowest price you can that breaks you even. Second, I would call your banks (not sure if you have a 1st and 2nd) and explore the possibility of a short sale.

If you are stuck in the home and can't sell, then I think it is safe to say you owe as much or more than it will sell for. That means you need to get the bank involved and explore their loss mitigation department. Let them know you are struggling, they will have you write up some things like a hardship letter, want your last two years of taxes, monthly account balances, and most recent paystub.

If you are approved, the bank will be willing to take a loss and thereby let you lower your price so the home will sell. Maybe they take a 20k-50k loss but they also get paid and don't have to deal with a foreclosure that will cost more and take much longer.

It really depends on your financial strength and how they evaluate it. If you just leave the property and stop making payments, they will foreclose. If they do that, it won't be fun and your credit will be severely impacted for quite some time. Also, depending on the bank, state and all that, they may be able to continue to go after you for the loss they realized on the property as a personal debt.

A lot of people bought homes, refianced or added a second, and got caught. The banks are hurting right now since a lot of loans are failing. So they are flexible to some extent. Also, this would permit your agent to stay involved and work on selling the house.

I hope this helps and goodluck!

Answer 3

Don't allow your home to go into foreclosure, that is a decision you'd regret for YEARS. It will screw you up in ways you probably won't anticipate.

If you are not in a financial bind, why are you considering this?

First, change Realtors, this one is not representing your best interests. Anyone that thinks that foreclosure is a good option in this situation is an idiot.

Second, once you get your new Realtor and your house is going back on the market, ask your Realtor for a list of what houses comparable to yours have sold for and price appropriately.

Next, have the Realtor suggest ideas to stage the home for sale. If one is available, have a home staging expert come work with you.

When it goes back on the market, check everything. Make sure the listing is correct, the pictures are good and you have a virtual tour. Find out what websites your home is going to be on and go look at the advertising. Listen to feedback you receive from your Realtor on how the house is showing.

Consider offering a buyer's agent incentive.

Take a deep breath, regroup and get that house sold.

Answer 4

You don't just "ditch" a house. It gets Foreclosed. That stays on your record a very long time, regardless of how much it ultimately brings. Maybe you do plan to stay in your next house a long time, but you're going to find it harder to get into it with that current mortgage still out there, and impossible if it's in Foreclosure. Planning to keep the same car for a long time, too?

Remember also that it will take some time before the Foreclosure gets to auction, and until it does, the legal fees and interest get piled onto your debt. Maybe they'll get enough to cover it, maybe not. If not, you still owe them the difference. That makes it a risky plan.

It's a bad idea to just walk away.

Put more effort into selling it. Paint, trim the bushes, wash the car, whatever will make it more attractive from the street. Keep the inside show-ready. Talk to your realtor, and listen.

After seeing that your realtor said this is no big deal, I take back what I said about listening to your realtor.

Instead, fire your realtor, and get one that knows what they are talking about.

Answer 5

Your real estate agent is either misinformed or lying to you. If you just walk away and let the bank take the house, the foreclosure stays on your record for 7 years. Even with having all of your other credit be spotless for the next few years, your ability to get other loans will be diminished. If you can get loans, the interest rates will be very high.

If you just want to walk away, I'd suggest a "subject to" transaction. Basically you sign a contract with someone (a real estate investor typically knows how to do these) to take over your mortgage payments, and in exchange you quit claim your deed to a land trust with them (or their company) as the beneficial interest. You have to be careful, as there are scammers out there who do these deals (that give us honest real estate investors a bad name). Where is your home located? I can do this deal, but I'm only interested in certain areas of the U.S. I can probably refer you to other reputable investors if you are out of my area.

Answer 6

First try to find someone you know and trust. Whether they are a broker, agent or attorney. Just b/c they are one of these three does not automatically preclude them from being the right person for you. You need to feel comfortable with them. Keep in mind during all of this, that they are working for you. If they are not working but merely collecting a paycheck, find someone else. Everyone of the aforementioned people can and will make a significant amount of money if you choose to work with them. Further, most markets in the US have tilted towards the buyers side to some extent. This means you are now in the drivers seat. Everyone in the real estate industry needs buyers. Best of luck. Joe...

Answer 7

I use to be a wholesale rep and please don't ditch the house. You will screw up any college for your girls and your credit. If you are in a tight spot and need to sell the house. First fire your agent because it seems that he/she just wants the money. OK, this is what you can do...

Any lender does not want to take your house. Call your lender and tell them that you are trying to sell and that you want a quick sale. They sometimes stop your payments and they help you sell the house. They don't want to lose money. Also stop your dsl and any other things that can help you save money. This is what I have seen people do the last year. Sell first before you buy another house and FIRE YOUR AGENT

Answer 8

your real estate agent is wrong. If you ditch the 1st home, then banks won't lend you the money you need. Things like foreclosures stay on your credit report for at least 7 years.

Answer 9

hell no its not a good idea! dont mess up your credit b/c your home has been on the market for only 6 months. come down off the price a cpl thousand, use a realtor, advertise in the paper for $40, if you have to sell quickly. If you are tight for money try cutting off the cable, phones, Internet, the non essentials until it sells.

Answer 10

Never just "ditch" a home. You will screw up your credit.