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Zillow user marielad from the Bayview area of California asks this question on Zillow Advice:

How do you sell your home when you’re upside down?

Being upside down, or underwater, means owing more than your home is worth.

  • Pam

    Two words: Short Sale

  • http://www.sandiegomodern.com San Diego Modern Homes

    More like a long sale.

  • Yvonne Styhr

    Sellers can only sell their properties as a Short Sale when they are upside down with their mortgages owed. In this real estate economy, regular property sales listed over the current market value become the Long Sales. Yvonne Styhr, California Realtor

  • http://www.MyPhoenixMLS.com Bob Stahl

    Certainly selling short is the most common way for a homeowner who’s “upside down” or “underwater” to sell her home. But the short sale must be accepted by the bank. Another alternative is to sell the home for what you can get and then pony up the rest of the money to pay the mortgage off in full.

    Remember, too, that while a short sale is much kinder on a person’s credit score than a foreclosure, it still is a negative mark. If the homeowner isn’t underwater by much and has the cash to pay the difference, that might be the preferred option.

  • Troy Fugate

    Owner Carry, otherwise known as Contract for Deed.

    Target borrowers with the ability to pay but no access to funds. They are usually willing to pay and wait for the market to return to normal.

    Its a win-win.

  • http://www.cbsnews.com/video/watch/?id=4668112n DebtFree

    Two words: Jingle Mail?

  • http://www.coloradohomefinder.com ColoradoHomeFinder

    The first thing that needs to be done is to contact the bank and start a dialog with the loss mitigation department about doing a short sale.

    A short sale is a real estate transaction in which the lender agrees to accept a payoff that is less than the actual mortgage loan balance and agrees to accept the proceeds from the sale as payment in full for the loan. Usually a short sale is less harmful to a seller’s credit rating than a foreclosure. And it is less costly for a bank to accept a short payoff than to go through the entire foreclosure process.

    As home property values have declined over the past two years many homeowners are finding that their homes are worth less than what they owe the bank. If circumstances require a homeowner to sell, due to a hardship such as a loss of job, relocation, divorce, or illness for example, they face the impossible prospect of trying to sell their house in a market where home prices are lower than their mortgage balance.

  • http://www.PortlandHomeAuction.com Aaron Majors – Pearl District Condos for Sale

    Short sale… Hire the best short sale company in your town.. It will make a huge difference on performance and your comfort.

  • http://www.nationalhousinghelp.org Sebastian Acosta

    First of all verify if the homeowner qualifies for a short sale. Contact the loss mitigation department of the bank and ask them if they would be willing to accept a short sale.

    The benefits of short sales can be tremendous, assuming you can find the right deals. The downside is that not every foreclosure property is worth doing a short sale. Frequently banks are able to negotiate directly with borrowers to reduce interest rates, assuming that the borrower has the means to make lower payments than they are now. If this is the case, inform the homeowner that they can do this, because most will choose to renegotiate their loans in order to keep their homes. Make sure that every homeowner knows about this option and has exhausted this negotiation process before presenting them with the short sales option. This is not only the ethical thing to do, but presenting them with all their options allows you to find the motivated sellers who have already explored these options but have come to the conclusion that a short sale is their best option.

  • http://www.nationalhousinghelp.org Sebastian Acosta

    First of all verify if the homeowner qualifies for a short sale. Contact the loss mitigation department of the bank and ask them if they would be willing to accept a short sale.

    The benefits of short sales can be tremendous, assuming you can find the right deals. The downside is that not every foreclosure property is worth doing a short sale. Frequently banks are able to negotiate directly with borrowers to reduce interest rates, assuming that the borrower has the means to make lower payments than they are now. If this is the case, inform the homeowner that they can do this, because most will choose to renegotiate their loans in order to keep their homes. Make sure that every homeowner knows about this option and has exhausted this negotiation process before presenting them with the short sales option.

  • http://www.bestinsurancetoday.com/ Kelly

    With over 20% of all homeowners being upside down with their mortgage, it’s no wonder that lots of people are starting to ask if it’s really worth staying in a home that’s worth much less than the mortgage they are paying.

  • Jason

    Short Sale Questions:
    Need to move to another city for family/job but upside down on mortage about 45K)….
    1) If a short sale is awarded, what is the estimated impact on how much your credit score will go down 100, 150, 200, etc?
    2) If a Short sale is awarded, would you be able to get get another home loan in the future? How long would (on average) would you have to wait to buy another home?
    3) If a lender is not willing to agree to a short sale then is the only option foreclosure (if you have to move)? any other advice?

  • http://Homeshortsales Jane

    Same question as Jason, 4/12/11.
    1.How long before we can buy a home if we get awarded a short sale?
    2.Would buying a newly constructed home help since builders are having a trouble selling homes now?
    3.If we don’t sell now, would doing upgrades to this home be a mistake?
    4.Is it wrong to expect that home prices will eventually go up?

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