How to sell your home when you owe too much on your mortgage

Having a hard time selling your home because you owe too much? Perhaps you bought the house at the peak of the market and would like to sell in order to get a bigger home or maybe down size. If you bought in the last 5 years you probably owe way too much on the mortgage unless you made a considerable down payment of 30-50%. According to financial data company First American CoreLogic, 11.3 million U.S. homeowners were underwater on their home loans at the end of 2009. This means that they owed more on their mortgage loans than what their residences were worth. You would like to sell your home or you are in a situation where you really need to sell but you do not know what to do but you do have some options.

Bring cash to closing.

Quite possibly the simplest and least complicated solution would be to take money out of your bank or investments and pay the difference at closing. For example if you have a $400,000 mortgage but you realistically can only sell the house foe $350,000 then the only way you can sell it without doing a short sale is to bring $50,000 to the closing to pay the off the bank. This may seem like a nauseating option but depending on your current situation it may be your best option.

This option is best for someone who is in a position where they can easily afford to continue making payments, their job is stable and they have a decent amount of savings. I had a client who did just this, he sold his condo that he bought at the peak of the market and took a considerable loss on it and he had to bring around $45,000 dollars to the closing table. He did not want to do a short sale and quite honestly he wouldn’t qualify and he really needed to buy a bigger house. The house he bought had dropped in price over $150,000 from when it was first listed, he felt the house was such a bargain that he could not pass it up. That $45,000 he had to take out of the bank was money well spent because he ended up saving money in the overall transaction.  He bought the house he needed and was happy with his decision.

Some people want to sell but may not be getting such a huge bargain when they purchase and would really need that $50,000 as a down payment. In this situation this person should consider a smaller down payment on a purchase so that he can pay off his 1^st loan and still have enough to purchase another home. Instead of having to come up with 10-20% down this person could opt for an FHA loan where down payments are as low as 3.5% of the purchase price. 

Renting

Renting the home is another option but perhaps the rent will not cover the mortgage and the taxes. If you are lucky enough to break even on the mortgage then renting is a great option. Others may find that the rent is not covering the mortgage and they still have to come up with $300-$500/month to make up the difference. That may or may not be more attractive than taking cash out of your savings to pay off your loan at closing. Consider that fact that you would have to rent it for at least 4-5 years before it would make sense to try to sell it with the hopes that home values have started to climb back up.

Short sale 

More and more homeowners are involved in short sales and this may be a last resort option and for some their only option. One thing to keep in mind, just because you owe more than your home is worth does not mean you will qualify for a short sale, if that was the case then everyone who bought a home in the past 5 years would be short selling their home. In order to attempt a short sale you will need to qualify and the 1^st step to figure out if you qualify would be to look at your finances. You have to be in a hardship situation in order to attempt a short sale. If you can easily make the mortgage payments and/or have enough money in savings to pay the bank the difference between what you sell the home for and what you owe then your chances are slim.

When your bank looks into your finances and savings and see you have a considerable amount of money they will just tell you that you are not in a hardship situation and to pay the balance at closing or just continue to live in the house and pay the mortgage.  Unfortunately many homeowners have limited savings but can afford to keep paying for the house and will just have to figure out a way to stay where they are until someday when the market turns around.

Refinance

Maybe you thought about refinancing to lower your monthly payment and then maybe you can rent the home and break even thus allowing you to purchase another home. This would allow you to use your savings for the down payment and not to pay off your 1^st loan. Under normal circumstances refinancing would be an option but when you owe more than your house is worth you do not have any equity in the house and you would not be able to refinance.

The bottom line is that there are not that many great options to get out of a house when your mortgage exceeds your market value. Possibly the best solution and least complicated would be to bring cash to the closing the pay off the balance but what is best for one person may not be a good idea for another. The fact is that you may just have to do what you can and stick it out for the next 4-5 years until either your finances improve and/or the values of homes stop dropping.

Selling your home when you owe too much on your mortgage

Want to sell your house but you owe too much on your mortgage?

I meet dozens of homeowners each month that are either behind on mortgage payments, or will be soon if their financial situation does not get better. The ever increasing taxes on homes are also making it harder for homeowners to keep current with their mortgage payment. These people would love to sell their home (they need too) but they can’t because they owe more then the home is worth. This type of homeowner is the ideal candidate for a short sale and there are hundreds in this area that should consider it.

A short sale is an agreement in which your bank agrees to accept a payoff on the loan for less than what is owed. Short sale provides a way for troubled homeowners to prevent foreclosure and many of the dire penalties involved. An example is a homeowner who has a $500,000 mortgage but the home is only worth about $375,000 in the current real estate market.

There are certain criteria to qualify for a short sale; you cannot do a short sale just because your house is worth less than you paid for it.

You must be in default or close to being in default (missing a mortgage payment). In the past a homeowner would have to be in default by at least 3 months to qualify for a short sale but today some lenders are willing to do a short sale if the homeowner is in distress and close to being unable to afford the next mortgage payment.

You have to show proof by using comparable home sales that your mortgage balance is more than what your home is worth.

The homeowner must prove they are in financial distress and submit a short sale hardship letter explaining why you can no longer make the mortgage payments. Hardship examples include loss of job, health problems, bankruptcy, death and divorce.

You will also have to show that you have little or no assets that you can use to pay off your mortgage.  You will provide bank statements and if you have a job recent pay stubs as well as the past 2 years tax returns. These items will help prove to the bank that you have a financial hardship and may have had one for sometime now. The last thing a bank wants you to do is walk away from the home and let it go to foreclosure. That is also the worst thing you should do as a foreclosure would wreak havoc on your credit as well as a possible law suit or wage garnishment where the bank can force your employer to deduct money from your pay check.

During a short sale the homeowner is allowed to stay in the home until it is sold, it could take 6-12 months from the start to the end of the short sale. The homeowner will not get kicked out of the home like a foreclosure and is able to stay until the home is sold. Just try to maintain your home as best as you can during this time to have a better chance of a successful short sale.

If you feel your financial situation is such that you need to sell your home but you can’t and you want to see if you qualify for a short sale call me at 914-403-4868 or email me at [email protected].

For more info on the short sale process please visit PutnamWestchesterShortSales.com

Staying in your home during a short sale

Staying in your home during a short sale?

I meet a lot of sellers that are in need of my help with a short sale on their home and one of the most common questions I get is whether or not they should stay in the home during the short sale process. Often these sellers cannot afford the mortgage any longer but are able to afford a rental and are considering renting during the short sale term. In realty there really is no reason to leave the house unless the house is in such bad shape that it is not livable.

If you are able to stay in your home during the short sale process then you should. Most sellers during the short sale process who are not able to afford the mortgage are not making any mortgage payments, whatever money they have left over they should save and use it when it is time to move out. The saved up money will be used for moving expenses as well as a deposit on a rental unless living arrangements have been made with friends or family members.

What many sellers do not realize is that a short sale is like any other house sale except the bank has to approve the offer. The owner should maintain the home to the best of their ability and make it look presentable during showings just like any other sale.

Another reason why you should stay in your home during a short sale is because your lender would most likely prefer it. They know that if you are in the home any problems that happened will not go unattended. Loads of problems happen when a house is vacant such as vandalism or if a water pipe bursts and causes tens of thousands of dollars worth of damage to the house, mold issues, mice, rats etc. So if anything you are helping the sale and in essence helping the bank lose less than they already are. The less the house sells for the harder it will be to approve the short sale with the bank.

A vacant house is an attention grabber, if people in the area or even prospective buyers who have seen that house realize the house is empty all the time they may come by “unannounced” to look around or who knows what else. Many of these things can lower the value of the home and as I mentioned above, the lower the offer is for the house the harder it may be to get the short sale approved.

If you must vacate your home whether you are relocating or moving out of state and staying in the home during the short shale process is not possible, no one is going to force you to stay. If you do leave the area and not able to check on the house, if possible have someone check on it once a week. If you can afford to have the lawn cut during the summer then that will also help the whole process and appeal of the home.

How long does the short sale process take? The whole process from the day the house is listed until the short sale is approved and it is time to move out could be 6-9 months or more. If could be even less than that but a conservative timeframe is about 6 months. I just closed on a short sale that took 3.5 moths from the day the offer was submitted. It took less than 2 months to find the buyer so less than 6 months for the whole process.  If you do receive an offer on your home and if your agent and short sale attorney tell you that the process is going well you should then start consider looking at rentals or making other arrangements. Banks are not very flexible with a closing date. Once they approve the short sale they will want to close in 2-4 weeks.

If you need advice on a short sale or want to know if you qualify for a short sale please call me or email me at [email protected].

For more info on the short sale process please visit PutnamWestchesterShortSales.com

If you are a buyer and interesting in buying a short sale or foreclosure home please visit: Westchester Putnam Short Sale Listings

Approved FHA condos in Westchester

Fha financing is becoming more and more common in the current real estate market especially among 1st time home buyers. The low 3.5% down payment is great for these type of buyers. First time buyers are also the majority of the condo buyers in Westchester. Unfortunately trying to find an FHA approved condo complex in Westchester is not easy and there are not too many complexes that are approved. I have compiled a list of FHA approved condos in Westchester below. This list changes often and more may be added in the future or removed.

White Plains – Granada Condos, Minerva Place Condos

Yonkers – Hilllcroft Townhouses, Monterrey Condos, Rivervew Club Condos, The Vista at Hudson Terrace, Westchester Terrace at Crisfield

Hartsdale – High Point of Hartsale, The Classic

Peekskill – Hillcrest Park, Woods III of Westchester

Yorktown – Villas on The Lake

Mohegan Lake – Lakeside Colony

Somers – Heritage Hills Somers NY

West Harrison – Lincoln Hancock Condos

New Rochelle – 60 Remington Place, Glenview Terrace Condos, Knickerbocker Lofts Condos, Prince Street Condos

Port Chester – Homestead Hills

Bronxville – Bronxville Glen

Dobbs Ferry – Village Green

Mamaroneck – Continental View Condos, Parkview Station Condos, Sweetwater Condos

Mount Vernon – Fulton Terrace Condos, Highland Manor Condos, Lorraine Terrace, South 11th Condos

Pleasantville – Foxwood Condominiums

Harrison – The Halstead Plaza

Tarrytown – Carrolwood Condos

To view all condos in Westchester for sale check out: Northern Westchester Condos and Lower Westchester Condos

Just sold short sale in Westchester

Just closed another successful short sale in Westchester County

I just sold this home in Yorktown Heights NY in 3.5 months. It took about a month and a 1/2 to find a buyer and then about 3.5 months to close the short sale. The owner owed over $600,000 on the home and the sale price of $425,000 was successfully negotiated.  More and more distressed sellers are benefiting from a short sale. The average short sale takes 6-12 months to close but that does not have to be the case. Make sure you choose a Certified Distressed Property Expert (CDPE) to sell your home and handle the short sale process.

condo for rent in Heritage Hills

Short term rental in Heritage Hills in Somers NY! – Lovely mint condition corner unit with private backyard. 2 bed, 2 bath and laundry this FULLY FURNISHED condo features 1 level living with no steps and recently updated with new kitchen, hardwood floors, new paint, moldings, updated bathrooms. Living room with fireplace, patio with large private rear and side yard. Complex features pools, tennis, clubhouse, fitness center, jitney to train and town. Short term rental Oct 1st – April 1st.

For more info and photos check out: condo for rent in Heritage Hills

To view all condos for rent in Heritage Hills check out: Heritage Hills Condo Rentals.

Are you preventing your home from selling

Are you preventing your home from selling?

Has your house been on the market for 3, 6, 9, maybe even 12 months or longer and still no buyer? Not even a low offer from a buyer? Have you made multiple price reductions on your home but still no luck with getting it sold? Before you blame the market and start dropping your price even further lets take a look at some of the things you should be doing to get your home sold.

Do you make your home easy to show? Easy to show would mean that an agent is able to show your home with minimal notice, 1-2 hrs tops. Those are the types of homes that agents want to show and will not bother showing the homes that are difficult to schedule. Some homeowners require 24 hr notice to show but often agents may be going out on a certain day to see a few houses and they have limited time to show their buyers some homes. They have ready buyers trying to make a decision on which home to bid on and your home may fit their needs. Because they can’t see it the same day as the other homes there is a very strong chance they will just forget seeing the home at all and just never schedule a showing.  Some homeowners always want to be home for all showings and do not want a lockbox put on the house. This may be the single biggest mistake a seller can make when trying to sell their home. If a seller tends to be home pretty much all the time then this is not really a big issue but if an agent and their buyer have to work around the sellers schedule then they will just pass on the house and see the other homes that are much easier to show.

Is your home always clean and in showing condition? Sadly I see a lot of homes that are pretty messy with clothes on the floor, dishes in the sink, tons of stuff allover the bathrooms. The presentation of the home is completely ruined and the 1^st impression of the buyer is not something you get a 2^nd chance at. Think of selling your home like a job interview, you would not go to a corporate office setting with sweat pants and a ripped t-shirt but this is the same look that you are giving your home when prospective buyers see it. I have seen homes sell for 10’s of thousands of dollars less than they should have because the seller refused to clean up.

Is your home always light and comfortable? By light and comfortable I mean all the lights turned on and the temperature of the house comfortable. If it is summer and you do not have the air conditioning on (or windows open and fans blowing if you do not have A/C) and the house is too warm you will see buyers go in and out of the house in a matter of minutes. They will not spend time looking in each room like they should, they will never see the house the way they should and may miss something they like. The temperature must be bearable at all times. If you are home during showings then make sure to turn all the lights on. This seem to be such a little thing but it is very important when having your home shown. If you are not home during the showing then make sure you leave as many lights on as you can when you leave the home. I have seen quite a few smart sellers that were not home when we showed the house and every single light was left on and it made for a much better showing experience for the buyer.

Do you leave the agent and buyer alone during showings? The best thing an agent an buyer wants to hear from a seller other than “Hi this is Ed McMahon from Publishers Clearing House and you just won $10,000,000” is “I will stay out of your way and if you have any questions please let me know”. Buyers do not want to be followed around by the seller, the agents job is to show the house and know what the buyer is looking for and what things to point out while touring your home. Often times a homeowner tends to follow right behind and makes the buyer and agent feel uncomfortable, they will end up rushing through your house and get out of these as quick as they can. The best thing to do is stay in the kitchen, living room or maybe home office and offer to answer any questions they have. If they have any questions and they almost always do then the agent will ask you and they you can engage them in a conversation and point out any features of the home you think they may have missed.

Did you have professional photos taken of your home? This is quite possibly the most important thing that must be done on any home regardless of the price of the house. There are no exceptions.  Most cameras the average person has access too whether digital, SLR or digital SLR have very basic and cheap lenses; have low megapixels and cheap flashes. These lenses do not show the entire room in a photo and often leave out important features. The lighting that the flashes provided is also extremely weak. I have seen photos of homes for sale in the area that I have also seen in person, these homes look so much better in person but you cannot tell from the photos. The photos are so basic that it does not intrigue the buyer whatsoever. No matter how low you drop your price these buyers will never have any interest in coming to see your home.

I have done research and have found that on average homes that have professional photos sell quicker (1/2 the time it usually takes) and for 8-10% more than homes that used basic camera equipment. Those numbers are astonishing but the fact is that homes with basic photos like what is seen in most homes currently for sale are selling for a lot less than they should.  I would guesstimate that 90-95% of all homes for sale are using basic boring photos and these homes are selling for a lot less than they should if they even sell at all. All agents have access to these professional photography services and they are not expensive and should be used when selling any house.

Make sure to follow these simple guidelines when selling your home, these are very easy things to do and they can help you sell your home a lot faster and for more money than if you did not do them.

If your home has been on the market for a while and you feel it should have sold by now please give me a call so I can show you my unmatched marketing campaign. With the proper marketing and exposure any home should have a buyer in under 30 days, no exceptions! Do not settle for anything less! My recent listings have on average sold in under 2 weeks and received 99% of asking price!

Jefferson Village Condo in Yorktown Heights NY

Lovely renovated 1st floor NO STEP condo with garage located in Jefferson Village a 55+ active adult condo complex. All new kitchen with new appliances, cabinets and granite counter. Updated bathrooms, tile floor throughout. 2 large bedrooms, 2 full baths. Low common charges and taxes. Jefferson Village features clubhouse, pool, sauna, tennis and more. Shuttle bus service to town and shops. 55 minute commute to NYC. Taxes after STAR approx. $2,300.    Asking price only $259,000!!

For more info and photos check out 46A Jefferson Oval Yorktown Heigthts NY or visit Jefferson Village in Yorktown Heights NY

Updated home for sale in Croton-on-Hudson NY

Lovely light and bright home in Croton-on-Hudson NY. Features include cathedral ceiling, sky lights, hardwood floors throughout, gourmet granite kitchen with breakfast area, Sunken family room, lower level has 2 family rooms, bedroom and bath. Large master with office area and door to deck, walk in closets. Lovely private corner property with in ground pool. Very large house, great for entertaining! Wow what a price, asking $535,000.

To view more details and photos check out: 2 Charles W. Briggs Rd. Croton-on-Hudson NY

179E Heritage Hills

Welcome to Heritage Hills Somers NY. Lovely light and bright Lincoln model in sought after Heritage Hills. Features include tile entry, pergo floors, brand new bathrooms, brand new floors and paint in kitchen, large patio over looking gorgeous private backyard! Storage shed, new energy efficient heat pump. Carport is right across from unit! A lovely condo a must see. Heritage Hills features pools, tennis courts, golf courses, clubhouse, newly renovated fitness center, jitney to train and town.

 

 

Fore more info and photos check out: 179E Heritage Hills Somers NY

 

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