Home Selling in Los Angeles>Question Details

Dph, Home Seller in Los Angeles, CA

I bought a house 3 years ago for 749,000 now I have to move because of a new job. I can only sell my house for 495,000. I will have to pay the

Asked by Dph, Los Angeles, CA Sun Feb 21, 2010

realtor fees and the balance of my loan. This will cost me more than 60,000. What reason do I have to do this, should I just walk away and keep the 60, 000 that I have in the bank and rent?

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I would short sale the house if you don't mind your credit to drop, but it's much better then paying $60k from your pocket plus $250,000 that you never see back at your house.
Web Reference: http://resocialclub.com
0 votes Thank Flag Link Sat Sep 29, 2012
Dear Dph,
Have you considered leasing your home? It might be the way to go for you rather then take a huge loss on the property. You will also save your credit which is very important for future purchases.
0 votes Thank Flag Link Fri Mar 25, 2011
How long does it take you to earn $250,000 after taxes? I suggest you speak with an attorney to discuss your options. ..... Happy funding, Rudi
Web Reference: http://www.umboc.com
0 votes Thank Flag Link Fri Aug 13, 2010
I would suggest you find out more about the 2nd position lien-holder, if any, before finalizing any decision. You may have recourse debt and a deficiency judgment that will follow you into the future, wherever you go. The IRS may be seeking taxes on the debt relief unless you can declare insolvency, which it sounds to me like that would be challenging to prove. You definitely need to seek tax and legal advice, in order to determine the path most suitable for you, based on your individual circumstances.
0 votes Thank Flag Link Thu Aug 12, 2010
It seems that my colleagues have mostly covered the choices for you. If you are going to rent your home out (which is a great option if everything, including taxes, insurance & mortgage are covered) and you want to purchase another home--you should make sure you talk to a local loan person. Many times you cannot purchase a home unless 1) your rental is breaking even or showing a profit and 2) you migh have to have euqity in your home. That is why it is important before making any of the decsions below to really talk to professionals, including a CPA (who can help you understand tax implications of a short sale or a foreclosure)...and also seek an attorney's advice as if you walk away or do a short sale the banks still might have the right to come afer you for the money unless you have a full release. . and even then I am hearing stores of some banks trying to collect. I am so sorry you are in this situation....There are so many who are ---You would think the government would take a look and really try to help he individuals -- not just the banks. Again, best of luck, but do check out all your options and make sure you talk to a RE agent who has had success with short sales, if that is the route you decide to take. Rose Nied, Alain Pinel Realors
Web Reference: http://www.apr.com/rnied
0 votes Thank Flag Link Sat Mar 13, 2010
As you can see there are options, please explore them all before you walk away. That may something you regret later. In addition, if you refinance even to get a lower interest rate, it is no longer original purchase money which could mean they will continue to pursue you. Know your options!!!

Good Luck!!!
Web Reference: http://www.di4homes.com
0 votes Thank Flag Link Sat Mar 13, 2010
I am a Certified Distressed Property Expert. It depends on whether you want to keep the home or not. Here are your options
1. FIND A TENANT and rent the property if you can cover your Mrtg + Property Tax + Insurance ( if you can this is a good option)
2. Since you have to move you have the option of short sale.
3. deed in lieu of foreclosure
4. Loan Modification ( may not work since you have to move anyways)
5. Foreclosure / walk away ( do not do this, this has a lot of long term consequences) You have Option go to my web site or call me.
There are a lot of things that i need to know so that i can explain you your options. There are new Government plans coming out as of 5th of April that you may qualify for in order to keep your house.
NO YOU DON'T PAY ME A DIME . Log on to my website to know more about what to do in your situation.
Pebble Singha
Certified Distressed Property Expert.
Web Reference: http://www.pebblesingha.com
0 votes Thank Flag Link Sat Mar 13, 2010
There are many options available to you. Give me a call so we can discuss them and decide what would be the best thing for you and your situation.

Michelle Gonzalez
Realty Executives Select
562-572-5224 Cell
0 votes Thank Flag Link Sun Feb 28, 2010
There are many possibilities here...
1. If you have enough to put down on another place without selling your current home, buy a new place and rent yours out. Make sure to charge enough for rent to cover the mortgage, insurance, and taxes. Let the market ride out and re-evaluate selling your home later down the line. If you are not able to buy without selling, then simply find a rental place for yourself. Depending on the location of your current home and the aesthetic appeal, you may even be able to get a few hundred a month to put in your pocket or help cover your new rent.
2. If none of this is possible for you, another option would be to put your property on the market as a short sale. If you can prove a hardship (it doesn't only have to be financial), the bank may allow this option instead of foreclosing. The short sale is less of a hit to your credit.
3. The final suggestion would be to ask your lender about a loan modification. You may want to do this before you put the property up for rental too! Doing a loan mod could lessen your monthly payment substantially and may make it easier for you to market your property at a better rent as well.
If you need any further guidance on any of these suggestions, please do not hesitate to contact me.
Best of Luck,
Samantha Cavallari
Prudential CA Realty, Los Feliz
0 votes Thank Flag Link Wed Feb 24, 2010
Cash is king.

Unfortunately, it's not the best idea but if you leave you keep the money.

In the long run, you will eventually buy a house years from now but renting is not a bad thing.

The only other idea is to see if the bank may take less and give the real estate agents some commission.

A good agent that knows short sales can negotiate this. Happy to refer you to someone.
Web Reference: http://usspaces.com
0 votes Thank Flag Link Tue Feb 23, 2010
Hello, This is a tough question that is facing so many people.

One of things to consider if you just walk away from your home is how it will effect your credit in the future. Even if you negotiate a short sale with your lender it will reflect as a negative on your credit. If you can possibly rent your home and carry the mortgage until the market gets better, it may be a better answer for you. It might be worth it to hang in there through the tough times and do what so many others in your situation are doing. If your current with your other obligations, and your credit is still good, that is something worth saving. I would try and hold onto that cash and not give it to lender.

Instead keep some aside, then take the money and get a great deal where you are going. you might be able to hang on to your property by renting it out, even at a deficit, and buy a property cheap in your area and make yourself a win win situation in the end.

If your interested in finding out what the market rent is in your area, feel free to contact me at any time, I would be happy to give you the information and to help you lease your home if you decide to do so.

I don't know your specifics, so it is hard to advise you any further, But best wishes for you

Blaine Richards, - Keller Williams, Hollywood Hills, 310-598-8634
0 votes Thank Flag Link Mon Feb 22, 2010
Here's the simple answer: If you rented this property can you cover your mortgage? If not, short sale is the way to avoid the 7 year hit that a foreclosure will make on your credit not to mention the you can't purchase for that long as well. Try and modify that loan; if that fails the same forms and system is used to short sale, you'll be ready to do either.
The best way to modify is making the initial contact with the bank yourself, just as long as you're informed and ready with what they will be asking for. I have a very simple modify packet I give out any client who needs it for free that includes all the forms all contact numbers you will need to have a successful loan mod.

Diego Esquivel
Coldwell Banker Allstars
13915 San Antonio Dr.
Norwalk, CA 90650
562-863-5867 office
Web Reference: http://fhapurchases.com
0 votes Thank Flag Link Sun Feb 21, 2010
I was reading your question again: If you put $250K down originally & now you're $60K negative, you're not quite in the same boat as many other short sellers who are $250K negative because they put only $60K down.

Do you know for sure that you could only sell your home for $495K right now? Is that a liberal or conservative guesstimate?

You should be thinking about how much further prices will drop and really look into your future, look far 10-15yrs.

You will not be able to purchase another home unless your income(s) can support both payments. After a short sale you may be able to purchase again immediately. Again, building your equity back up from where we are now, close to the bottom. Consider as, you didn't lose all your money in this particular property, because you'll be building it back up in another.

If you'd like to talk more about your situation, let me analyze the #'s in your neighborhood, see if there's any hope for you to break even, any possibility at all.

EmilyKnell1@yahoo.com (email me directly, don't reply on Trulia)
562-430-3053 cell
0 votes Thank Flag Link Sun Feb 21, 2010
Keep your money. Your hardship is you have a new job and would love to sell your home and break even but can't. The bank will allow you do to a short sale. In a short sale you can negotiate for there NOT to be a deficiency judgment given to you for the negative amount owed (if you had refinanced this loan). IF you never refinanced your loan you will NOT get a deficiency judgment.

The Mortgage Debt Forgiveness act states that you will not be taxed by the IRS on the negative amount, this law expires at the end of 2012.

The bank pays ALL of your normal seller closing costs including real estate commissions. When do you think your home will be worth $825K again, so you could sell and break even? Will it be before or after the Mortgage Debt Forgiveness Act expires?

You CAN purchase again after a short sale, you CAN build equity back up and your retirement income from the bottom of the market.

Some banks don't require you to have a financial hardship to do a short sale.

Please let me know if you'd like to talk about your options further. In California it doesn't make sense to just walk away and let it foreclose or do a deed in lieu.

562-430-3053 cell
0 votes Thank Flag Link Sun Feb 21, 2010
Dph, Congratulations on your new job and for paying a large portion of your mortgage down - my answer assumes that you do, indeed, have a mortgage. Even thought the value of your home has decreased as it has for all homeowners who purchased around the same time you did, it appears that you are much closer to fulfilling your promise to repay the funds you borrowed than many folks who are in a similar situation. Yes, it may cost you $60K but what would walking away cost you? At the very least a black mark on your credit rating, and as I am not an attorney, I'll just say possibly a lot more. As my colleagues mention, renting out your property might be a good option. No matter what else you do, you should consider the consequences of the "walk-away mentality" and consult a qualified real estate attorney and CPA. Best of luck.

Risa Liebster, Realtor®
Keller Williams Realty
0 votes Thank Flag Link Sun Feb 21, 2010
Hi Dph,
I would be careful with just walking away from your home.
You are responsible for that home and what happens with it and to it until your name is off the title.
You should consider all options.
From what I read, renting it might be an option.
While you come here and seek advice the advice you seek is both Legal and has tax implications.
Rather than consult a REALTOR® who is there to help you buy, sell or negotiate a home, they are not there to answer, or assist you with your tax or legal questions.
Your next call should be to a Real Estate attorney and a CPA.
Then when you have made your decision based upon qualified advice I am sure an agent can help you if you decide to short sell, or rent your home or ???
a quick list of options to bring with you, along with your origanal and any loan paperwork to a real estate attorney and CPA is here. Upside Down Options -

I wish you the best in your new position.

Harold Sharpe
So Cal Homes Realty
(951) 821-8211
CA DRE License 01312992
Graduate REALTOR® Institute,
Real Estate Masters,
Certified Distressed Property Expert,
0 votes Thank Flag Link Sun Feb 21, 2010
A short sale might not always be the best solution for a homeowner. Each homeowner's financial situation is just as unique as a person's fingerprint, Gary and I make sure that we do a thorough forensic analysis of their situation before we proceed forward. It is critical for California Realtors to have a working knowledge of California Anti Deficiency Laws. Realtors must be able to advise their clients appropriately and ensure their clients seek legal advice because in some cases it is Better to go through a foreclosure to get the protection of the Ca Anti Deficiency Laws. It is up to the homeowner to decide whether they will accept their lenders right to pursue deficiency language commonly seen in short sale approval letters.

Nicole your statement is VERY misleading 'If a short sale is approved for your property and 'your primary residence, the bank will forgive your debt and all fees'

This depends on if there is one loan and it is your primary residence, is there a HELOC (2nd) or is the 2nd original purchase money?

We feel that education is key in this market with so much Misinformation and foreclosure scams out there, we sought out this education to ensure we could properly help families get on the path to recovery.

Dph, you must verify with your CPA if you are eligible for the Mortgage Forgiveness Debt Relief Act HR3648. We as agents cannot give you legal advice.

Jennifer Ricco CDPE, PSC, Retired LAPD
0 votes Thank Flag Link Sun Feb 21, 2010
You will have to weigh all of your options financially. The long term credit effects of walking away from a home can be more damaging than exploring your options though a Short Sale of you property if you absolutely feel it is not something you want to hold on to and rent out or pursue a loan modification. I am a certified Short Sale specialist, and I lay out all options for my clients to make sure they are very informed and aware of available solutions. In the event that you decide to consider a Short Sale of your home, your bank DOES consider job relocation a "change of life circumstance" and therefore a hardship. If a short sale is approved for your property and 'your primary residence, the bank will forgive your debt and all fees (incld. realtor, title, closing cost, etc) will be covered by the bank. This forum is not enough to thoroughly explain how this all works, but I would be glad to sit down with you and further explain your options.

Nicole Lindler, Realtor
Prudential California Realty
West Hollywood, CA
0 votes Thank Flag Link Sun Feb 21, 2010
Hi Dph,
You really have to weigh all of your options. In order to really guide you properly an agent really needs to sit down and show you all of your options. I did a great blog in here about 'Distressed Homeowner Resources get Your FREE reports! Do You Know All Of Your Pre Foreclosure Options?' You can read this post by going to: http://www.trulia.com/blog/jennifer_ricco_e-pro_wcr_qscreti/…
My husband and I serve the Greater Los Angeles area. If we can be of service to you please do give us a call we have a proven track record and can provide past client references.

Jennifer Ricco Retired LAPD
Certified Distressed Property Expert, CDPE
Pre Foreclosure Specialist Certified, PSC
Keller Williams VIP Properties
25124 Springfield Court
Valencia, Ca 91355
(661) 290-3837

We service Los Angeles and Ventura Counties
0 votes Thank Flag Link Sun Feb 21, 2010
Hi D,
There is so much to answer your question that I don't feel I can do it justice in this forum. I recently wrote a blog post about strategic default (just walking away before attempting any other resolution) that you might find helpful.
There are so many options available to you, and lenders want to do a workout that doesn't include foreclosure, because they get less for those properties, which in turn hurts the value of everything else in their portfolio. In addition, walking away will hurt your credit for a longer period of time and for a larger percentage of your FICO score than negotiating a workout with the lender.
I have been trained in all aspects of home retention and short sale and foreclosure, and am certified in three areas as well. I would like to have a quiet conversation with you in the privacy of your home to discuss your options. Lenders consider a job move real hardship, and I believe I can assist you in a loan workout of some sort. PLEASE, for your long term benefit, DO NOT JUST WALK AWAY without exploring ALL OF YOUR OPTIONS.
eborah Bremner
REALTOR, 00588885
Certified Short Sale Professional
Certified Home Retention Specialist
(D) 818.564.6591
Blogging at: http://TheBremnerGroup.com/blog
0 votes Thank Flag Link Sun Feb 21, 2010
You have a couple options. In your situation the best thing to do is keep the property and rent it if you can and get an inexpensive rental where you are moving to. If this is not possible, you can attempt to sell it for the price you need to break even before you attempt a short sale. Short sales done right will not hurt your credit as much as a foreclosure but are still something you should avoid if at all possible.

Please contact me through my website below for more information. You are not alone in this situation!
0 votes Thank Flag Link Sun Feb 21, 2010
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