Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
possibly doing a short sale...advice?
I am searching for non-biased advice, any and all would be appreciated. My dh and I purchased a home in 2007 with an 80/20 loan and we currently owe ~$252k. I was laid off from my job in 2009, which is fine because we have since had 2 children. My husband now works out of state (he has since July 2011). His 3 hour commute and the gas is killer. We can afford our monthly payment and have never been behind on payments. We have been trying to sell our home for the last 2 years. It was origianlly on the market for 12 months, only 2 showings. We re-listed it in August, dropped the price twice to get 2 showings. Now we GREATLY reduced the price again, to $215k, thinking that may lure people in and we may get more than one offer. We did get an offer, a horrible one! Part of me thinks, whew! We have won half the battle and we got an offer, lets take it and do a short sale. The other part of me thinks it is so insulting that we pass on it. And I do know all of the implications for a short sale (credit damage, etc).
We own 10 acres an hour closer to my dh;s job and we plan to build our forever home there. We would love to take advantage of rates and go ahead and build. We have tried to re-fi w/our current lender and 5 others and we can not b/c we are underwater with an 80/20 so we are just stuck. We do not want to wait it out b/c we want our son to start Kindergarten and not have to move schools. What would any of you do? And I am not bringing $60k + to closing! Would you go through with a short sale, refuse the offer and hope and pray another comes along (which no other has in 2 years). So frustrating!!!
Re: possibly doing a short sale...advice?
I have never personally done a short sale, but we are looking for a house and considered buying a short sale property. From what my realtor told us, you have to get approval from the bank to do a short sale, and you have to show some kind of financial hardship to get that approval, like losing your job. If you haven't been approved for a short sale, I would seek more info about that before accepting any low offer.
ETA: Doing a short sale will most likely affect your ability to obtain a new loan also.
If you do a short sale now, it will probably be a couple of years before you can get financing to buy or build a new home.
Have you thought about renting out your current place?
Yes, the PP is right. You have to be approved for a short sale, which means you have to prove hardship that makes it impossible for you to stay in your current home. You don't always have to be behind in mortgage payments, but sometimes you do. If you can afford the payments, it might be difficult to get approved for the short sale, but every situation is different and every bank is different. There's a chance your bank would approve you for a short sale since you have been unemployed. Was your husband transferred to another location, or did he just choose to take a different job in a different location? If he was transferred and didn't have a choice in the relocation, that may also help you get qualified for a short sale.
Keep in mind, if you do have assets that would allow you to do a traditional sale and cover the loss yourselves, you will have to use your own money first. Your mortgage holder isn't going to take a $60K loss just because you don't feel like using your own savings. If you have $60K in assets, you probably won't get approved for a short sale.
Even if you do get approved for a short sale, your credit rating will take a big hit and you're not likely to be able to get a mortgage for your new forever house right away. You'll probably have to rent for a few years to build your credit back up to be eligible for another mortgage.
In any case, you need to talk to your bank before accepting an offer for less than you owe (if you don't plan to make up the difference yourselves). In a short sale, the bank has to approve the offer, not just the seller.
Mr. Sammy Dog
You can't just do a short sale because you feel like it.
Listen to sjb&apa. She is smart.
This. If you want to get out of your house you will need to bring the money to the table to make up the difference b/w selling and what you owe. We are (well will, once we sell) and it's more than 65K. It is what it is...
Ditto PPs. If you have the assets the bank will make you use them to pay to get out of the house. We just did this to sell our house. It sucks to have to do it but that is part of owning an investment. Some investments gain value, some lose value. The contract we signed with the bank doesn't care if we lose money.
If you have the assets you will either have to use them or foreclose and run the risk of the bank coming after you a judgment for the difference. If you short sell you will have to wait a couple of years to get another loan and even then your interest rate will probably be higher. If you foreclose you have to wait even longer.
It sucks to pay that money but sometimes you just don't have a choice. Believe me I would have loved to not lose a huge chunk of our savings to sell our house but we didn't have a choice. We moved out of state and needed to sell our house.
This. You have to first get approved for a short sale, and it can take some time (we considered buying a short sale property, but it just seemed too risky). And it really wrecks your credit for awhile.
thanks :-)
And I totally agree with your first statement. A short sale is not a "get out of jail free" card. There are consequences to doing a short sale, and not everyone is even eligible. There are millions of people in this country that wish it was as simple as making the bank eat the loss instead of the homeowner. Me included. I'm stuck renting a condo don't want to own anymore, but that's just how it is. Unfortunately, real estate has been a bad investment for a lot of us, and there's no easy way out of a bad real estate investment.
Mr. Sammy Dog
thanks :-)
And I totally agree with your first statement. A short sale is not a "get out of jail free" card. There are consequences to doing a short sale, and not everyone is even eligible. There are millions of people in this country that wish it was as simple as making the bank eat the loss instead of the homeowner. Me included. I'm stuck renting a condo don't want to own anymore, but that's just how it is. Unfortunately, real estate has been a bad investment for a lot of us, and there's no easy way out of a bad real estate investment.
Mr. Sammy Dog