Home Selling in Seattle>Question Details

Trulia Seatt…, Other/Just Looking in Seattle, WA

What is the best way to sell a house that is worth less than what you owe?

Asked by Trulia Seattle, Seattle, WA Mon Apr 8, 2013

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Karen Mcknight’s answer
Hi Trulia :),

The impulse answer is to do a short sale. However, to do a short sale, you must have a "hardship". A few examples of hardship are medical expenses, reduced income, and having to move for a job. Having to move for a job can be within the Seattle area, if the job requires an extra long commute that puts a "hardship" on you.

If you are moving up to a larger home, it might even be strategically smart to bring cash to closing, so you can close and buy the more expensive home. The reason this can work to your benefit is because if houses are appreciating at 10% annually, the $300,000 home goes up $30,000 and the $500,000 home goes up $50,000.

Each situation will require specific analysis. If neither of the above two options work for you, you stay in your current home until it appreciates enough for you to have positive equity. You may want to see if you fit one of the refinancing programs, so you can get your interest rate down to today's still record low rates.
0 votes Thank Flag Link Mon Apr 8, 2013
0 votes Thank Flag Link Sun Apr 28, 2013
I recently attended a seminar for agents & brokers which identified nearly a dozen strategies for dealing with a home with a mortgage that is 'upside down' or more than the home is worth. The take-away lesson from the seminar was; don't try to be an expert. Instead, seek the advice of experts. You're going to need the advice of a team of professionals with lots of experience dealing with underwater mortgages. You should consult with an attorney and a tax adviser. When you understand your options, you should engage with an experienced Realtor. The good news is; you will be surprised to learn how many options are available to you.
0 votes Thank Flag Link Mon Apr 8, 2013
You're in good company with these realtors offering sound financial advice. Definitely make it a plan to reach out for legal/tax consultation. If short selling is the best route you certainly have great options within this pannel and myself. Best of luck
0 votes Thank Flag Link Mon Apr 8, 2013
If you owe more than it's worth, the first question is, "Do you have the funds to make up the difference?" Last year I had a client bring around $60k to the table. They avoided a short sale and all the uncertainty, credit damage and frustration that process brings. We discussed the alternatives and they decided it was best for them to pursue this route.
If you don't have the funds, you need an agent with a solid track record of closing short sales. You need to commit to the process and cooperate with all the documentation requests in a timely manner and get legal counsel as to the effects the short sale will have on your credit and how it may affect you.
If you are asking for a way to sell a home for more than it's worth, that becomes tricky. What a home is actually worth is what a willing and able buyer and a ready and able seller agree to. If the buyer needs financing, as most do, the appraiser will have some influence over the final outcome.
Depending on where the property is, the level of demand for similar homes in the area, it's condition and the seller's capacity to maximize the marketability of the home you may get close.
You need an experienced and seasoned Pro to help in the process. This is not a job for someone just starting out or someone who hasn't kept up with the best marketing methods.
I hope this answers your question.
0 votes Thank Flag Link Mon Apr 8, 2013
You should get legal and tax advice first. Short selling might be your best option, it might not. More than half my business is short sales, and I recommend McFerran & Burns as a lawyer who can give you the legal advice. They have several offices, and you can reach them at 253-284-3838 for a consultation appointment.

If they do recommend a short sale, give me a call at 425-681-8364.
0 votes Thank Flag Link Mon Apr 8, 2013
You need to first speak to a Real Estate Lawyer and a Accountant that is skilled in Real Estate. Than you will be better Educated to decide what you should do.
Hope this helps.
0 votes Thank Flag Link Mon Apr 8, 2013
Short sale and I specialize in those. There is lots of details involved. Feel free to contact me at 206-920-5555.
0 votes Thank Flag Link Mon Apr 8, 2013
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