I have a Underwater Property: Help!
If you are reaing this blog article you might be in a state of dispair. You are worried & don’t know what to do with a underwater property. I am not talking about a property that was recently flooded (even though we buy those too) I am talking about a property that you owe more then what it is worth.
Now if you try & go the traditional real estate route in this situation you most likely will have no luck. Most Realtors are clueless as to how & help a homeowner who has an underwater property. They will tell you to wait it out & sell when the market it better. Or they will say rent it out for the time being to pay down the mortgage.
Let’s be honest, you may not like either idea. So what can you do to actually sell the property? One of the only solutions in this situation is to either get a loan modification or to short sale the underwater property. A short sale is completely opposite of what it’s name suggests. It is a 3-12 month process where we negotiate with the bank to forgive a fraction of what is owed on the mortgage so you can sell the property.
Now you might be thinking… “why would they do that?”. Well if you are behind on payments they would ideally like to try & avoid the foreclosure process because it is long & expensive for them. If they can short sale the property it can happen quicker & they typically will not lose as much money on the property. Now a short sale will have negative affects on your personal credit & finances. You personally guaranteed the mortgage when you initially signed to purchase the house so the bank will not forgive that when they accept a lessor value.
For the tax implications of a short sale I would advise speaking with a financial expert (CPA). However, even with financial & credit implications it is easy to recover from. You can still purchase a property again & it will fall off your credit report within 5 years.
If you are currently own a underwater property please contact us today! We have helped several owners in your situation & would love the opportunity to help you. Please call us at 920-215-4201 or fill out the form below.