Home Selling in 60130>Question Details

Wolfiea, Both Buyer and Seller in 60130

Could I sell my condo and have the buyer just take over the payments in IL?

Asked by Wolfiea, 60130 Sun Mar 13, 2011

I want to sell my condo and buy a house in the Northwest suburbs of Chicago. My condo is located in Forest Park. It can be a great rental property but not sure if I want to deal with the headaches of being a landlord.

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The short answer to your question is probably not. The only loan that I am aware of that is assumable is a FHA/VA loan. Do you know if your loan terms falls under either of those. If you have your loan documents from when you closed, they will specify your terms. After you determine if your loan is assumable or not, the question becomes does the potential buyer qualify for the terms of your loan. If they do is the property worth more than the loan balance and if so how will the buyer make up the difference. If the property is worth less than the balance than you find your self in a possible short sale situation which would present more questions than I could fit in the space allowed here.

I am very familiar with Forest Park, having lived in multiple houses on Marengo and on Dixon at one point. I have been working out of Oak Park for the past 8 years and just recently moved my license to an office in the city. I would love to sit down and talk with you about helping you sell your condo and buy a new house in the NW suburbs. We can discuss your options for the assumable loan among many other topics. I look forward to hearing from you. My cell number is 708.212.2587 or email me at ckrohe@frankelgiles.com
Web Reference: http://www.frankelgiles.com
0 votes Thank Flag Link Mon Mar 14, 2011
First question you have to ask a lender is would you qualify to buy a house without the proceeds from the condo. Banks don't like lending to buy a 2nd residence without the sale of the 1st residence as it is possible for you to default on the condo. That is referred to as buy and bail. Then the 2nd part is the headaches of being a landlord. Does your condo HOA allow for rentals? Many HOA's now restrict rentals and requiree owner occupancy in order to qualify for FHA loans for the units for sale. Talk to a local agent, best of luck!

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1 vote Thank Flag Link Mon Mar 14, 2011
Hi Wolfiea,
I agree with the other agents that have responded, first things first, check your loan documents. Most of the loans we are seeing are not assumable, however there are always exceptions.
Why not sell direct to the person you are considering will assume your mortgage? Rates are still at record low, and now there are great programs and incentives to qualify a buyer. It may be best for you to sell now so you can move forward. I would be happy to provide you with information on the current market value of your unit-email me.
Regarding the potential of renting, if you choose to hang onto the property, check with your association, or your condo decs and bylaws to see if renting is allowed. Some condo buildings allow rentals while other do not, this may help you determine your final decision. Best of luck to you!
If you are interested in hearing how I sold my last Forest Park listing in one day, email me, sondra.savino@bairdwarner.com.
0 votes Thank Flag Link Mon Mar 14, 2011
Mortgage assumption is not really popular with lenders. Some small banks may do it, but they will want people to qualify for the loan the same. My suggestion is do a rent to own. That is almost what you are talking about, but they put down a more substantial downpayment and pay monthly toward ownership. Someone who wants to own will be better to the property - probably - rent or rent to own is always a leap of faith, but it can pay off in the end. Use a professional to help you, though. That will help protect your interests.
0 votes Thank Flag Link Mon Mar 14, 2011
Technically, you could. But it wouldn't be in your best interest.

The loan documents you have on your condo specify whether the loan is assumable. Very likely, it isn't. Read the documents. However, there's a technique called "subject to." You deed the condo to the buyer and the buyer agrees to make payments. That violates your loan's "due on sale" clause, and gives your lender the right to foreclose on the property. Practically, that's very unlikely to happen. But it could. So there's that risk.

The bigger risk to you is if the buyer stops making mortgage payments. Your name is still on the mortgage. You're still responsible for it. All you have from the buyer is a promise that he'll make your payments. If he stops, the lender comes after you.

That's why it's not in your best interest--with the information you've presented--to go that route.

The answers below discuss some of your other options. For instance, find a property management company to handle the landlording responsibilities.

But first you should check with a lender to determine whether you'd qualify to buy a house if you're still the condo's owner. It may turn out that you wouldn't qualify, and that your only real choice is to sell the property first.

If you're confident you have a good idea what your property would sell for, and the price of the property you'd like to buy, you can check with a lender first. Otherwise, have a Realtor do a CMA on your condo and give you some information on homes in the area you're interested in. Then check with a lender. But do all that before making the decision about whether to try renting out your condo.

Hope that helps.
0 votes Thank Flag Link Mon Mar 14, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Hello Wolfiea,
You should check your loan documents or contact your lender to determine if you have the type of loan that is assumable (not many are nowadays) for a buyer to take over payments if you choose to sell.
Also, if you are considering renting your condo; do keep in mind that you would still be responsible for the taxes and any condo fees associated with the complex. These expenses are not passed on to the renter.
Hope this helps with your decision.
Good luck!

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Mon Mar 14, 2011
Wolfea,
Only you can decide that. If you do not want to have headache of dealing with tenants, another option is to let some property management company manage it. This way you can be a landlord without headache of being a landlord.
Web Reference: http://www.judysharma.com
0 votes Thank Flag Link Sun Mar 13, 2011
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