I see a bad moon aris'n and I need advise to minimize the damage. Thanking you in advance for reading and any thoughtful consideration.
I'm losing my job soon and I have a serious illness that eventually spells long term disability. It's a race against time and time is winning. I have to move to find employment and I need to unload this house asap. I've never been late on my payments and now I guess I should prepare to see my beautiful FICO scores tank. (813EQ / 830TU)
Purchased in June, 2009
FHA 5.5%
Original Loan: $235
Balance is about $213,800 (approximate/not payoff)
ZEstimate is $213,500 and comps are between $200k – 229k (for homes with very appealing upgrades)
I talked to a couple of agents who advise a minimum of $10k to get ready for market and list higher ($230's?).
But then I'd be facing low offers and point negotiations because of the comps. Plus I'd have to put the 10k on my credit card and don't think that's a smart option.
If I'm lucky I might get $220-225k with superficial upgrades ($3-5K in cosmetic work). That's kind of standard and maybe negotiate 3k toward closing, with no additional repairs and no points. If it sells for the mortgage payoff amount, but short on the agent commissions, will it still be considered a short sale?
With just the note + 11% commission I'd have to start listing at $237k and that's the absolute max I could ever dream of getting with the local comps. It will sit on the market at that price and I'll be dropping the price 5k in 2-3 months; and another 5k at the end of the summer. Been watching the listings and that's the trend. I lose the 10k right out of the gate and start sinking further immediately.
So is this a short sale no matter what I do? Here's a big one: Should I let it default and head for the hills?
A lot of speculation here but that's all I've got. My brain is dead and I'm not in the game.
So what do the smart people say?
PS. The story gets worse. The neighbor 2 doors down is selling a similar floor plan with all the swanky upgrades this summer. He was advised to list at $239 (For Sale By Owner) but his mortgage is paid off and he can negotiate whatever he wants. It could work in my favor if he sells at that price, but I don't think he can do that without an agent.
And the neighbor next door is planning to move this summer and ...rent.
This is a sad story.
Time for a beer.
Starting Score: 647
No. No family. That's good news. Would hate to drag anyone I loved through this.
But thanks for stopping by.
(Ironically ... the employer is the 2nd largest healthcare company that just agreed to pay for 87 million members' identity theft protection... and gives the right foot of fellowshi* to anyone looking at long term disability.)
Thank you for the suggestion.
Renting will cost more in the long run than a short sale. Crazy huh? I ran the numbers and it has to do with taxes, insurance and property management.
Maybe the better question is: How do real estate agents get paid in a short sale? Is it the same percentage?
If I sell it myself and pay the lion's share of the loan balance, can I refi the rest under a different loan progam? (Fat chance - but willing to throw it out there.)
I'd get better than forum advice personally, but it does depend on what state you live in: some states are non-recourse states and in those if you haven't ever taken cash out of the house you can hand the keys to the lender and walk and there's no repercussions other than losing whatever equity you have in the home (which doesn't sound applicable here).
If you're stuck in a recourse state, I'd try like hell to get it sold before I let it burn... if you're underwater on your mortgage currently there may be some sweetheart deals available via a vis HARP or otherwise which might buy you some breathing room but I honestly don't know enough to advise on that; rent in many places may be higher, and given my financial situation I'd rather lose some money in the short term to keep the credit report clean in the longer run but your time horizons and finances might not permit it. Might even be worth looking into BK options if you're that stuck, but again professional advice is recommended.
Thanks Revelate. I've never heard of a recource state - I'm not in one unfortunately but it does give me more to consider.
http://www.legalmatch.com/law-library/article/what-is-a-recourse-state.html#sthash.btsRwKGh.dpuf
I was hoping to hear how others might handle this scenaro. I'm not exactly underwater. The comps keep dropping and my property value keeps dropping at the same time. I don't see where any local sales are in excess of the comps. That's as far as I can go at the moment unless I shell out more cash on a lawyer.
I think I can get the mortgage balance. I'm willing to eat the 5k (+/-) to get it cleaned up for market. And I can cover closing fees ($2500) if they're not padded with the loan company's fees. What I can't get is; loan balance + agent commission + points/closing types of negotiations.
I'm starting to think I should try FSBO and see if anyone wants the property as-is. It's not like I trashed the place. It's a decent house and has a great backyard.
You got me thinking.
Appreciate the insight.
