Unfortunately, charge offs can generally remain in your credit report for about seven years--as long as your charge offs remain unpaid the lender(s) can make attempts to be paid--any future lender(s) will take your charge offs very seriously--if you are looking to purchase in the near future, work diligently on having the charge offs eliminated--speak to the original creditor(s) and see if something can be worked out as far as any payment(s).... more
I like Bruce's answer. Before considering taking any action, you need to understand that IF you were to do it - against recent SOLD comps, if the investment would have an ROI.
Sometimes a conversion is necessary to get the home sold. For instance, my parents were trying to sell a home of theirs a few years back. It was 2 BR/2Bath and a really nice ranch with all sorts of vaulted ceilings. Many potential buyers were like, "wow this is great but I really need a 3 BR". So after 30 days of hearing that again and again, dad took the dining room and walled it off from the foyer/lr area - and added a door from it into the "br hallway" area. Viola! A 3rd BR on the cheap. And then it sold very quickly thereafter.
With your home the way it is ... are there a good pool of buyers or do most of them want/need a 3rd BR. This needs to be understood.