Jesse, Home Seller in Davenport, IA

I must move due to employment. My house is current but severely upside down. Can I short sale?

Asked by Jesse, Davenport, IA Tue Sep 2, 2008

I've never been late and my credit score is close to 800. However, I must move a few counties north. If I rent, I won't get anywhere near my monthly mortgage of $1300. What are my options to get rid of the home? Unfortunately, my wife and I purchased our home at the top of the market at $236k. We'd be lucky to get $150k now.

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5
Jesse,

Yes being in Florida does change the whole scenario completely.... However the same rules to foreclosure prevention apply no matter where you live... Iowa, Florida or wherever... with a few minor differences..

You say that you doubt that you can rent your current home for enough to cover the $1,300/month mortgage payment.... which is probably true...... However, if you can rent the property for, lets say, $1,000/month, cover the additional $300/month for the mortgage payment, have some cash reserves left over to cover general maintenance, repairs, etc....... this will probably be a much better way to go than letting the home go to foreclosure..

While it will mean a loss to you for a period of time.... Always Remember... 60% of something is better than a 100% of nothing any day.

Good Luck,

Paul H.
0 votes Thank Flag Link Wed Sep 3, 2008
Jesse,

Yes, being in Florida does change the whole scenario completely.... However, the same rules to foreclosure prevention apply no matter where you live... Iowa, Florida or wherever... with a few minor differences..

You say that you doubt that you can rent your current home for enough to cover the $1,300/month mortgage payment.... which is probably true...... However, if you can rent the property for, lets say, $1,000/month, cover the additional $300/month for the mortgage payment, have some cash reserves left over to cover general maintenance, repairs, etc....... this will probably be a much better way to go than letting the home go to foreclosure.. Trust me, you dont want to go that route...

While it will mean a loss to you for a period of time.... Always Remember... 60% of something is better than a 100% of nothing any day.

Good Luck,

Paul H.
0 votes Thank Flag Link Wed Sep 3, 2008
I meant for this to be in the Davenport, FL thread. Sorry about that. Trust me, things are horrible in this market. I have to just rent it out and hope to only pay a couple hundred dollars to keep things even.
0 votes Thank Flag Link Wed Sep 3, 2008
Jesse,

First of all, the real estate market in Davenport, Iowa has not dropped anywhere near the 36% that you are describing in your current situation (purchased for $236K... now worth only $150K????).... in fact this market is still appreciating at a clip of about 2% to $4% per year.... depending on the area....So, I seriously doubt that your house has dropped as much in value as you claim it has..... Unless... it is in considerably worse shape now than when you bought it... or you refinanced it way beyond its true value...

In terms of the viability of you atempting to complete a short-sale... that has to be determined on a case by case basis...

Feel free to give me a call and I will be more than happy to go over your current situation with you....

However, I can tell you that the worst thing you could do right now would be to walk away from the home and let the bank foreclose on it.... your credit will be ruined, and it will limit your future options in home ownership

See the attached link for more information on pre-foreclosure alternatives...

Paul David Hiebng, Realtor
Grampp Realty/GMAC Real Estate
2500 18th Street
Bettendorf, Iowa 52722
(563) 508-1649
0 votes Thank Flag Link Wed Sep 3, 2008
Hey Jesse,

You're in a position many Iowans are facing right now. The advice I would give you would be subject to a few questions.. but I'm going to do my best to give you advice based on what's best for your long term plans.

IF you were to short sale, you would be carrying the shortage (in most cases) after you sell the home. What that means is you'd be responsible for paying back the difference. If you decided to move forward with that, you'll still have some monthly expense to service that debt. I bring this up for one big reason.. it's similar to the renting scenario. If you rent, you also will have a monthly expense.

Without talking to you personally, it's tough to say what makes most sense - but IF you can handle being a landlord, renting makes a lot more financial sense. You'll have tax advantages that a short sale will not offer.

If you'd like to discuss these options, please feel free to contact me.

Thanks again!

Tyler Osby
Certified Mortgage Planner
Four Legacies Mortgage
515-991-7102
tyler@tylerosbyteam.com
http://www.wealthwithmortgage.com
0 votes Thank Flag Link Tue Sep 2, 2008
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