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What to do with my house? I owe at least 20k more than it's worth.

I'm moving to California, and currently own a home in Washington state that I need to get rid of.  What are my options?  Would doing a short sale be the best bet?  What are the penalties of doing this?  I am going through a divorce,so financial hardship also play a part in this.  I just don't have the ability to rent out the house and find new housing in California.  Any advice?
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September 24 2010 - Tacoma
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Answers (15)

The divorce certainly makes any choices on a housing situation harder.I am not sure if the home if still in BOTH names? are you BOTH on the note? Even when you get divorced and IF the house was deeded to only you,if you are BOTH on the note,regardless of what the divorce decree ways you BOTH must file a short sale.
This is crucial as you need to know if your soon to be X is on board with a short sale IF this is going to be your only choice.
First confirm who is on the note.
I have had sellers go through this and ONE party is unwilling to participate the short sale.That could determine your next step as you cannot do it if both are not on board.
If you own it on your own,I would DO ALL I can to TRY and keep it.You say you do not have"the ability to rent",and I am not to clear what that really means.All homes will rent and bring in some return.If you mean it will not sustain itself,then could you ( or both of you if you are both on the note) cover the difference until you could sell and get out from under the home at a later date? I know this is a HUGE emotional drain.DO NOT make a further mistake with your credit or finances.TRY to keep as much in control in a situation that you have little control of. Let a Realtor give you an idea of the value,and the costs to close.Depending on how much is owed you can see what other choices there are.Maybe you can capture a lease purchase? Ask your Realtor based on activity in your area.I had MANY tenants/LP opportunites call me on my listings this year.MANY had 10% ddown and had no issue with the rent or purchase price ( usually because all they really wanted was a tenant situation and because of poor credit they had to use the some of that downpayment as a deposit to get a lease!) For you ,that doesnot matter,you can have some cash flow and even if they did NOT cover the entire rent monthly,they would pay it up front.So it really works out. Get informed,do not rush,and think long and hard.A short slae should be avoided at all costs,if you can.


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June 13 2012
I would speak to a Realtor immediately who can also recommend an attorney who specialized in Short Sales.
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June 13 2012
Best to get legal advice. Generally speaking though a short sale is better than a foreclosure for multiple reasons, all of which an attorney needs to explain to you, not a real estate agent. Agents are not licensed to practice law...but sometimes i think, trying to be helpful, they might attempt to cover topics that an attorney really ahould address. Hope this helps! I have a good referral if you need one.
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June 12 2012
It sounds as if you have a legitimate hardship...if you didn't sell it for less than what is owed to your lender(s) what other option is there?
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February 03 2011
Ok first things first, have you spoken with a realtor who did a Comparable market analysis or are you getting the value of this home from Zillow? Secondly, go back to that realtor and ask their opinion of what the market will bear and where she thinks your market is heading. I am so sorry to hear about your troubles, but renting for a year, even though you say you dont have the ability to do so, is probably a lot better for you than tossing it all aside. You are talking 20K difference,  am assuming in a divorce that that 20 is being split by both of you.....I hope life starts treating you better....good luck.
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February 03 2011
Since you are having financial hardship you should talk to a attorney. Bankruptcy may be an option to consider.  
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February 03 2011
Call your lender and request a loan modification.  The lender will ask you for a huge pile of information.  You will be asked for paystubs, bank statements, tax returns, and most of all a hardship letter.  Some of the banks are lowering the interest rate to 2% to allow the market to recover.  I have a couple of clients that got 2% on their investment properties.  Most of all, keep in contact with the lender, don't let their calls go without a response.
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January 10 2011
Short Sale!   So many homeowners are doing it.  You should find out how this works.  It's not as hard as it may appear.  There's many agents specializing it now.  Keep in mind you do need to find someone who knows what they are talking about and experienced!

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September 27 2010
Get expert advice from the Washington State foreclosure hotline.  You can google that in and take a look or call 1-877-894-4663.
The hotline is offered by your state and they have no financial interest in the outcome of your decision.  They can discuss your options with you before you.
Good luck to you.
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September 25 2010
You have 4 options
1. Rent the property out and welcome to being a landlord
2. Walk away and let the bank foreclose - worst on your credit
3. Call the bank and see if they will do a Deed-in-lieu - not as bad as #3 but still pretty bad on your credit
4. Do a short sale, get a REAL GOOD short sale agent ... not just a PT player

Or stay where you are...

Good luck
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September 25 2010
20k is nothing compared to the amount of folks in our state and throughout our country that are 100k+ underwater on their homes.

Your best bet is to talk to a real estate attorney who can advise you and educate you on the consequences of a short sale, deed in lieu, foreclosure, etc.
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September 24 2010
If you are able to rent and move on, I always view that as a positive. Short sale is always an option considering you have a hardship, but for $20K would it be worth the credit ramifications you would face? Do you have a second mortgage or Home Equity Line of Credit (HEALOC)? You may end up paying that back if you do. If you consider a short sale, interview agents until you find one that is experienced in short sale negotiations and has closes several short sales successfully and also consult your tax advisor and possibly an attorney. Good luck!
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September 24 2010
Well, it starts with what your intentions are.

Do you want to stay in the home, or do you want to sell?

It may be possible for a loan mod or short refi, but it depends on your individual situation.

If you want to short sale the property, I can assist you with that as I am a certified short sale negotiator.
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September 24 2010
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September 24 2010
I would start by chatting with your lender. Pehaps they'd offer a loan modification or a deed-in-lieu...you may save yourself a lot of time and angst if one of these are an option over a short sale. Keep in mind that if you have a 2nd mortgage, there is always a chance that they still come after the balance of what you owe after a short sale or foreclosure is complete. For these matters, it's best to consult an attorney.
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September 24 2010
 
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