Home Selling in Louisville>Question Details

Emily052786, Home Buyer in Louisville, KY

Selling an underwater condo

Asked by Emily052786, Louisville, KY Fri Feb 22, 2013

I purchased my condo in 05 for 109,000. Thanks to many forclosures in the area the value is about 10-15k less than what I paid. I currently owe 99k. How can I sell something underwater when I would need to pay 5-6% to a realtor? Should I do fsbo? There's no way I could lose another 6k. What should I do?

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Oh, and by the way, I have a Louisville Ky buyer client who may want to buy your condo, if you decide to sell. If you list with another Realtor, please have that person call me.
Web Reference: http://metro1realty.com
0 votes Thank Flag Link Fri Feb 22, 2013
Hello Emily,

You are not alone in this situation.

Many home owners find themselves under water these days. Mostly due to no fault of their own.

You have some options:

1. Loan Modification
2. Short Sale

If you are able to secure short sale approval form your lender, you will not have to pay the Realtor out of pocket. The commissions are negociated in the approved short sale list price. The bank will pay commissions based on the net proceeds from the short sale.

If Wish You The Very Best Luck!!!!!

Best Regards,

Kawain Payne, Realtor
0 votes Thank Flag Link Fri Feb 22, 2013
Hi Emily. Not only do you not need to pay me (I'm a Realtor), but you may even walk away from the transaction with up to $10,000 cash in your pocket if its done right! Huh? What? Yes, you heard me right. Not only may you walk away from the closing table owing nothing, but you may end up with many thousands of dollars, like my Indiana client I got $8,000+ for last month. I mention it in this blog http://metro1realty.com/how-dangerous-is-it-if-i-lose-my-clo… Go to near end of blog for reference.

Call me at 502-254-9600. I can help.

Good luck.
Web Reference: http://www.metro1realty.com
0 votes Thank Flag Link Fri Feb 22, 2013
I can help you with this,We would need to do a short sale with your Mortgage Company
Just closed one a few days back,It is process and I would need to discuss this in detail with you

Call me
Sue Moody HRC
Realtor/Broker IN /Ky
Re/Max Associates
502-693-3443
soldbysue2@aol.com
0 votes Thank Flag Link Fri Feb 22, 2013
As far as options for how to sell if you owe more than you would receive based on current market values, there are really only two options to sell it.

1. Pay the difference at closing. If you go this route, see cost reduction possibilities below.

2. Try to get the bank to accept a short sale. If you go this route, your credit will take a beating, but the commissions will come out of the bank's proceeds not your pocket. Be sure your agent knows how to navigate the insane world of short sales. They take forever with no guarantee that the bank will approve it, and they require a TON of hassle. But it could keep you from having to write a check for thousands of dollars at closing.


Here are a few thoughts to help you evaluate the cost-benefit analysis with regard to agent/agency involvement...

1. For Sale By Owner - PROs: no commissions (unless you choose to allow agents to bring you a buyer and pay them a finder's fee). CONs: usually FSBO's typically sell for less (buyer is trying to get a discount because the seller isn't paying commissions).

2. List with a company that does flat fee listings - PROs: Cost is fixed, you know it going in. Gives you MLS exposure for a flat fee. Often less expensive than a % based commission. CONs: usually fee is paid at listing so could be an expense with no sale. Some of these type listings are limited service meaning you still handle your own showings, negotiations, or other parts of the process a full service listing would provide.

3. Negotiate the commission on a full-service listing to something you can afford to do - PROs: MLS exposure. professional marketing and negotiation. because there are no standards regarding commission charges and fees you can negotiate these with your broker. CONs: Some offices do not negotiate their rates - but that is company/office specific. May be harder to find an office that is willing to negotiate rates/services.

4. List with a short sale specialist. They negotiate the commission with you technically but practically it gets negotiated with the bank as well. PROs: they know how to handle a short sale listing and bear most of the hassle burden for you. CONs: doing a short sale destroys your credit and usually takes forever.

Feel free to call with more questions or if you need help with any of these options.

Kevin Griesser
E3 Realty LLC
(502) 664-9161
0 votes Thank Flag Link Fri Feb 22, 2013
Dear Emily,
The housing market is now showing signs of recovery. Some homeowner has been able to negotiate their loans with their banks for a more favorable mortgage payment. This is something you should try first. If you do not have to sell, you might consider waiting to see how the market recovers in your area.
0 votes Thank Flag Link Fri Feb 22, 2013
Another option is to ask for a short sale from your lender. You walk away with not owing anything or gaining any profits. Your credit will be hurt and you won't be eligible to buy another property for 3 years. You also have qualify for the short sale. Let me know if you need additional information about this option.
0 votes Thank Flag Link Fri Feb 22, 2013
Emily, I understand your pain on not being able to sell for what you paid. Condos have been hit especially hard in Louisville. I would suggest speaking to an agent to find out what your condo could bring in value and if it is not what you need, I would seriously consider renting it until you can get the value you need. Having a rental property is a great way to build wealth and diversify your portfolio. I'd love to help in any way I can. Call or email me if you'd like to talk. Larry Gatti
Keller Williams Realty
502-554-9445
Larry@larrygatti.com
0 votes Thank Flag Link Fri Feb 22, 2013
Hi Emily052786,

I'm assuming you have to move? The market is improving however, you could be talking another couple years in the condo market here - it's typically slower than a single family home. Does your association allow for rentals - possibly you could rent it for a year or two? Selling it yourself is also an option - you are going to have to work hard to gain visibility though - advertise on line - even open house - you are limitied in what you can do since sinage rarely helps in a condo and you have no way of posting to the large web sites such a REALTOR.com. It could be a long process for you that could cost you money in the end as well. Have you even spoke with a realtor yet to get a professional opinion of what you might expect? If not, I would, you may be surprised!
0 votes Thank Flag Link Fri Feb 22, 2013
Statistics show that you could pay 5-6% to the Realtor but get 7% more for the Condo.
Do you think that you are qualified to do the job of a Realtor? Go for it.
Why do you not consider holding on to it, now that the Market is going up?
So far; you haven't lost a penny!
0 votes Thank Flag Link Fri Feb 22, 2013
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