Hey, you guys. In today’s blog post, we’re going to be discussing how to sell my house that is underwater. And what we mean by underwater, in this scenario, is you owe more on your home mortgage than your house is actually worth. So technically speaking, you are underwater on your mortgage. This was very common back in 2009, 2010. I mean, as we progress into the future with the economy changing, it might be common once again. So what happens when homeowners are underwater on their mortgage, they do not necessarily have too many options to sell the property, sell the house, that is underwater.
What Can I Do When My House is Underwater?
Option #1 to Selling a House that is Underwater
The first option would be to do what we call a short sale. This can happen when you sell your mortgage short of what it is worth. An example being, say you owe $100,000 on the house, the house is only worth $80,000, so with the short sale, you have to submit a bunch of paperwork and request that the lender take a lesser value for your property. And they send out an appraiser, et cetera. They do a bunch of other paperwork and then they will potentially forgive that $20,000 of debt owed or they will implicate it on your next year’s tax returns as income that you claimed. So that’s one scenario with a short sale.
Option #2 – Renting Your House that is Underwater
If you don’t necessarily need to sell the house that’s currently underwater, what I would recommend is possibly doing a rent-to-own scenario, or just renting the property outright and having a tenant pay down your mortgage until you are positive when we talk about equity. So say you owe $100,000, the house is only worth $90,000. Well, if you can have a tenant stay in there and pay that mortgage down from 100,000 to 90,000, that would be a perfect scenario. And then you can possibly go sell the property at a later time frame. But when you go to sell an underwater property, you need to be aware, if you list it on the retail market with a realtor, you’re going to be paying 6, 7, 8% in real estate commissions, and that all needs to be factored into your bottom dollar, and if it would truly make sense for you to sell your property with a real estate agent.
How Can We Help?
We can assist you in the short sale process by going through a company like our own, where we buy houses in the Appleton area for cash, and we can help you negotiate a short sale with your lender so you don’t have to do any of the work. We’ll send all the information to you, you fill it out, you send it back to us, and we will get in contact with your lender and start the short sale process. So if you have an underwater property in Appleton, Wisconsin, or any of the surrounding communities, please feel free to reach out.
We would love to assist you here at CB Home Solutions. We help homeowners every day who have a property or a scenario that they are trying to avoid by selling their house, income property, or whatever it might be, to a company like our own. So I look forward to talking to you. If you want an as-is cash offer, fill out the form down below, or give us a call on our office line, which is (920) 215-4201. Thank you so much and have a great day.