Profile picture for chrisnbrew

Should i short sell?

I bought my condo for $390,000 and its now worth maybe $190,000. I have no equity and have about 3 more years on my interest only payments. After that i am expecting my payments to go up. I cant see the value ever getting close to where i bought. When the payments go up, i wont be able to afford it. I am wondering what I should do? What are my options? 
  • October 17 2011 - US
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Answers (9)

I think you should consider walking away.
  • January 25 2012
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Short sale is your best way out. In markets that have depreciated that much it will be decades before you ever have equity again.
  • January 25 2012
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Go to www.makinghomeaffordable.gov

You will learn about your options to refinance that interest only loan when your house is worth less than you owe.

It's important to talk to an accountant that is versed in short sales, mortgages and real estate.

After exhausting ALL possible options of keeping your house, and getting your accountants advise, seek the help of a Realtor proficient in short sales.

Good Luck with your issue, and know that you are the majority, not the minority of those that purchased homes during the time you did!

Best WISHES!!
  • January 01 2012
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If you can afford your payments, you are in a better situation than many. Like the stock market, you wouldn't buy high and sell low, of course unless you need the money back and can afford taking the loss. If you short sale your home, your credit will be affected. Not all short sales can be approved by the bank though. You need a true hardship, which may be your case if your payments go up in the future. My team specializes in foreclosure avoidance so feel free to message me if you would like to talk about your options.

Also, recent changes are happening making it easier for loan modifications. Check out the article below. Cheers!

http://money.cnn.com/2011/10/24/real_estate/housing_refinance/index.htm?hpt=hp_t2
  • October 28 2011
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Profile picture for sunnyview
Without knowing what you would qualify for, your general options would be short sale to sell for less than your mortgage, a loan modification to put your loan on a fixed rate or a longer term, walking away allowing the bank to foreclose or possibly a deed in lieu. 

You are wise to deal with this now and not wait until your rate goes up. Your best option having lost 50% of your mortgage value may be short sale, but you have to qualify and you also need to get tax and legal advice before you make that jump.

Take a look at this hardship list and see if you think you might qualify for a short sale.
  • October 20 2011
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Please speak with an experienced local Realtor with short sale experience. Please keep in mind there needs to be a hardship, IE lost job, divorce, death for the bank to forgive the debt. No offense, but being upside on a property is not a reason for a bank to allow a short sale. They are the ones losing the money, talk with a short sale specialist & they can fully explain. Wish you the best of luck. Spirit
  • October 20 2011
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Profile picture for prodropbox
Hi:

There are several things to consider.  First, are you behind on your payments?  If you are behind, one of the suggestions already given would be to either try modifying the loan or to do a short sale on it. 

On the other hand, depending on where your condo is located, have you thought of the possibility of either renting it or leasing it out?  If it's located in area that is considered 'desirable,' this might be a way for you to have some steady cashflow.  It might also help you get 'over the hump' when it comes time for your payments to rise. 

Unfortunately, you may be right that the value of the condo will never get back up to the amount you paid for it.  The question you need to ask yourself is, what are your long-term goals, both in your life, and for that condo?  Can you stick it out for the length of time it will likely take for the real estate market to turn around? Or do you need to think more short-term, because you either already can't afford to make your payements, or that time will be fast approaching?  There's a lot to think about. So start doing that now, before the time comes when you won't have any options left to you.

I wish you success in making that decision.
  • October 20 2011
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Profile picture for mr.longbeach
Find someone to take over payments, people who want a condo like your but got denied for a loan by the bank. It's called owners financing , you may even inflate the interest rate and purchase price to get a cash flow per month
  • October 20 2011
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If you have already ddetermined you won't be able to affor it.
you can either try to modify the loan, bank might lower payment but will not reduce the $390,000, or you can short sale it.
To short sale you must find an expert realtor with the tools necessary to do it the right way. This involves a seasoned negotiator, or lawyer. This is the most important part of Short sale.  You need to get your negotiator to have the bank forgive the difficency etc.
There are some things involved that need an expert.
If I were you I would short sale.
Good luck
  • October 18 2011
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