I am currently looking into selling my home. I owe 187,000 on it and the county info I get says it is only worth 161,000. What options do I have?

Asked by frankeamber, Eagan, MN Sun Dec 30, 2012

I am currently looking into selling my home. I owe 187,000 on it and the county info I get says it is only worth 161,000. What options do I have?

I want to buy a townhouse after selling my current home. What can I do with the money I owe on my current home? Can I buy a home with no money down and who will get stuck with closing costs when selling mine and purchasing another. Please help looking for answers.

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Herman Antonov’s answer
Herman Anton…, Agent, Shoreview, MN
Thu Jan 3, 2013
The value of your house is not determined by the county. You can sell it on a CD, get 10-15% down, someone in there to pay your mortgage and use that down payment to buy a town home. This way you won't have to short sell and will get the down pmt. a lot will argue that you have to short sell, I am not a fan of short sales. Rent it out if you can, but then again, you will have to save up for awhile before you can build that down pmt. just a thought
0 votes
Mike Kelcher, Agent, Burnesville, MN
Sun Apr 6, 2014
Frank had this question in 2012. I hope he found his answers by now.
0 votes
Andrew Aberc…, Agent, Edina, MN
Sun Apr 6, 2014

I would be open to discussing your options and showing you the true value of your property. Please give me call 612-840-1093
0 votes
LaHomesLLC, Home Buyer, Baton Rouge, LA
Sun Apr 6, 2014

First, double check the worth of your property, county info is not very accurate. Spend a few dollars and get an appraisal.

If you can no longer afford the monthly notes then a lease option or assumption of your note would be some first alternatives to prevent you from losing the house or destroying your credit. If done correctly, a lease option or assumption of note will get your back payments paid for you , stop foreclosure from your bank and eventually get your house sold for what you owe therefore preserving your credit.

Stay away from traditional real estate agents, they are out to get a commission which you can not afford. They won't tell you about lease options or assumptions because they don't make much money on these processes even though these alternatives can save your ass if they are done correctly. I know because I have done many of these and help homeowners in financial trouble get out from under their debt.

LAST RESORT - A short sale will probably still leave you owning the bank the difference and ruining your credit if the bank has to sue you for the difference between what you owe and what the house sells for thru thru the short sale.

0 votes
Cody Anderson, Agent, Minneapolis, MN
Thu Mar 27, 2014

Market value is different than taxable market value. Be glad that your taxable value is lower than what you feel your home should sell for.

I would interview a couple agents for the job because Trulia and Zillow are NEVER accurate for current market conditions or prices.

Lets discuss strategies when you have time.

My Results Blog

Cody Anderson, MN Licensed Realtor

Metropolitan Home Team

Phone: 612-242-5752

Email: Cody@MetropolitanHomeTeam.com
0 votes
Andrew Aberc…, Agent, Edina, MN
Mon Mar 17, 2014
The county info is looking at property (land) and tax value, unfortunately it does not look at the market data surrounding your neighborhood which can be significantly different. Websites like Zillow and Trulia only give the estimates they show based on county info and not from recent sales, listings, etc. If you would like more info please feel free to contact me.
0 votes
Russ Douville, , Saint Paul, MN
Tue Apr 16, 2013
First, there isn't a direct coorelation between tax value and sale price. Better yet, all other things being equal, if the taxes go down a borrwer can afford a higher principle and interest payment!

Second, if the home does turn out to be worth less than the amount you owe, there is the possibility of a short sale in which your lender agrees to accept less than they are owed at closing.

And third, unless you (or your spouse) are a veteran, there really aren't a lot of no money down loan options out there. However there are several "little money" down options. Although you may not be able to pay closing costs for the buyer of the home you're selling, when it comes time for you to buy, that seller may be able to help with your closing costs.

Best of luck with your sale!
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Wed Mar 6, 2013
Hi, Frankeamber!
So sorry you're in this pickle. This economy has taken a chunk out of so many homeowner's equity. That's partly what's stalled the real estate market the last few years, people just can't afford to move!

So, for all intents and purposes, you owe more than the house is worth potentially. Though, I agree with one of the agents here, the TAX ASSESSED MARKET VALUE is NOT the real market value of your home. It may be more, it may be less.

If you do owe more and choose to do a short sale, you won't be able to purchase again right away. You might be able to do seller financing on the current house, which may still impact your ability to qualify on the next one if you want to obtain a conventional mortgage.

Talk to a couple of agents and a couple of lenders to determine what's best for YOU! That's all that really counts.

Good luck!!
Web Reference:  http://www.homestosellmn.com
0 votes
Chris Block, , Saint Paul, MN
Tue Jan 1, 2013
I will say once again; completing a short sale is about the worst thing you can attempt to do. You have to wait 3 years to repurchase 99% of the time which does not even fit your goals!

There is no indication that you are under a hardship or experiencing difficulty making payments either. Just because someone may potentially (we do not know for sure) be underwater does not make them a good candidate for a short sale.
0 votes
Edith Karoli…, Agent, Winnetka, IL
Tue Jan 1, 2013
Do not rely on these numbers, you will need a very experienced are Realtor, and if you do not have one or know of one let us know here and we gladly recommend an experienced Realtor for you. It would
be good to also work with a Realtor who has had a lot of experience with short sales, as this may be
one of your options.....

Once you do a short sale, which requires various conditions and the acceptance from the lender to do so, and then there will be limitations on you to buy afterwards, So very careful, get all the information up front before making any kind of decision, not fully understanding the terms and what you can do thereafter.....

You may want to consider and discuss this option with your Realtor, could you rent your home, which of course depends on location, size and condition of home and for how much you would have to rent it, in order to cut even with your loan, insurance and taxes and maintenance....

At then you need before you take the first step make sure you do know what you want and can do thereafter.... As I am as protective of my clients as a mother hen, I would not recommend having
two mortgages, if you are even able to get the second one which I doubt ..... But of course you
could rent yourself, if your current home rents out for a significant enough monthly rent, considering
that it may not always be rented of course you could try to get a two year rental contact....

Then you rent what you can afford based on your current income, and you try to save down payment
and in the meantime hopefully the market in your area, which I cannot assess not being a Realtor from your area, will by then have improved, and you may be able to sell without owing money or not
too much to the lender at the closing ..... but to make any good decision you need to put all the
facts in writing in front of you, with the help of a trusted experienced Realtor and a local experienced
loan officer, providing you both with all the numbers.....

So seek the advice you need before making any decision. You are not alone in this situation....

Edith YourRealtor4Life
Working always in the very BEST interest of her clients
@Properties Chicagoland, N and NW suburbs and the North Shore
EdithSellsHomes@gmail.com EdithSellsHomes@atproperties.com
visit my website at http://tinyurl.com/YourRealtor4Life
0 votes
Tom Schwartz, , Minneapolis, MN
Tue Jan 1, 2013
You can do a short sale
See http://www.mnrealestateoptions.com for comprehensive info
0 votes
Thomas Simon…, Agent, Edina, MN
Mon Dec 31, 2012
Frank: The value the county says your home is worth is an average. By Mn law it is suppose to be within 5% plus or minus. Very difficult to comply with. Your best action is to sit down with a good Realtor, determine the value of your home first with costs to see what your position is. Next you will need to talk to a good mortgage banker to get prequalified. You might find out that renting your home might be an option to allow you to move on. You can anso discuss a short sale with the lender but this is not a good option if you are planning on buying something else right away. Start with determining the value and your present position first. Call if you need my help, I have been selling in Eagan for over 25 years. Tom
0 votes
Chris Block, , Saint Paul, MN
Mon Dec 31, 2012
There sure are a lot of answers here. I will summarize then what I believe to be the BEST options for you.

1) It is true that everything starts with the value of your home. Most realtors will give you a market analysis for free. Have at least 2 agents do this for you. They should be within $5,000-$10,000 of one another. If there is a drastic difference they should explain to you their reasoning. If you are still not satisfied get another realtor until you find a person you like.


- A short sale is worthless if you would like to purchase a TH right now, because the wait to repurchase is 3 years. You also need to have a hardship which you have not expressed to us.

- Renting the home out while seeing if you have the DTI necessary to purchase another home would be the best option, and most likely the only option, for you. You can not go FHA twice, so if your current home is FHA, and you cannot refinance due to being underwater, then you will need to go conventional on the TH. It will all just come down to DTI.

- If you have DTI issues there is always the possibility of having a co-borrower as a final resort. If you have a mother, father, brother, sister, etc....who would be willing to stay on the loan for 1-2 years that may get your DTI up to where you can purchase a TH. You will refinance ASAP and take the co-borrower off the loan.

- The only other option is if you have a large down payment of 10%. If this is true you can look towards seller financing. In that scenario the bank standards don't matter and is my specialty.

As to your other questions.

1) You will not be able to buy a home with no money down is my best guess. I do know of some DP assistance programs that do not require you to be a first-time buyer. However, usually there is a length of time from the last purchase. I do not know if you can immediately purchase a home after selling using DP assistance. Either way, my Loan officer (or any other realtor you use) would answer this question for you. Just looking at your mortgage balance though it is very possible your income will be the barrier anyways.

2) You will get stuck with the closing costs on selling your home. The market is starting to turn where I believe seller paids will soon be going away, but at this time if you want to stay competitive these should be accounted for in the seller's net. Everything else in the transaction the seller always pays.

3) But it will be a trade-off as a buyer. You will also be required for realtor commissions on the sell-side. I can not speak for anyone else, but I believe if you use the same realtor to help you purchase a home they will give you a break on commission for the sell-side. For me it is usually a full 1%. Also, as the buyer you will pay zero realtor fees, and your realtor should be able to still find homes where the seller will cover ALL of your closing costs.

Hopefully this answers all of your questions. The bottom line is that if you are motivated there are ways to achieve your goals. Part of our job as realtors is being problem solvers. Don't stop until you find a realtor who can show you the best path. If you are not satisfied with the answers realtors tell you in the interview process just keep searching.

Good luck!

0 votes
Mike Kelcher, Agent, Burnesville, MN
Sun Dec 30, 2012

The value of your home isn't determined by the County. The real market value may be significantly different, so don't pay a lot of attention to what the County records say.

You may be able to sell your home at a price that would enable you to purchase a townhome with no money out of pocket, but the two transactions depend on a lot of "unknowns". You should have a Realtor do a market analysis on your current home and determine a realistic selling price and what your "net" would be after all costs. If you owe more than you can "net" from selling it, you may want so simply hang on to it and rent it out. There are both advantages and disadvantages of owning rental property and you should have an experienced Realtor with knowledge of the rental market assist you. I've owned rental property since 1968 and I like it a lot. The rental market is quite strong now, overall.

Townhomes can certainly be purchased with no money down...if the necessary requirements are met. I'd have to have more information. It is possible to get sellers to pay all, or most, of your closing costs.

If I can help, call me. 763-228-2967

Mike Kelcher
Realtor - SFR
RES Realty
0 votes
Jacqueline K…, Agent, Apple Valley, MN
Sun Dec 30, 2012
First, it is not uncommon that the county tax assessed value does not reflect current market value. It is a good first step to see what the home would likely sell for right now- a Realtor can run this report for you and itemize your costs to sell.

If you are short to pay off what you owe and the closing costs on the sale, here are a couple of options.
1) pay off the mortgage and costs yourself. You can use any money you have on hand or can borrow. If you get a loan, the loan can not be tied to the home
2) check if you can qualify for the purchase while keeping your current home. If so, you could rent out the current home until the mortgage is paid down further or the value increases. Rental rates have increased making this a good option for people in your situation.

To answer your question about purchasing, you will likely need some money down on your new home. Many buyers in your area use an FHA mortgage which is 3.5% down. Dakota County has some funds available for down payment assistance but you must meet requirements, check with the CDA in Eagan. A loan officer will be able to tell you if there are any options right now for buying without money out of pocket.
0 votes
Kelly and Kr…, Agent, Eagan, MN
Sun Dec 30, 2012
First you will need to have a real estate agent do a comparative market analysis for you to determine a range for your home's eventual sales price. You should also ask for a seller's estimated selling expenses report to be prepared for you. This report gives an estimate of the costs involved in selling your home and what the proceeds will be on the sale of your home. This will help determine if you will be able to sell your home traditionally or if you will have to sell it short.
If you need to do a short sale, I work with a law firm who specializes in negotiating short sales.

I would be happy to do a comparative market analysis and seller's net sheet for you.
If you would like to discuss any of this further - feel free to contact me.
Kristin Long
0 votes
Patrick Paul…, Agent, Minneapolis, MN
Sun Dec 30, 2012
You have a number of good suggestions already, so I'll just add another potential option: renting your home so you can stay current on your payments and keep your credit in good standing. Most of your options come with unappealing ramifications, but you should be aware of all of them. The first step is to have a Realtor assess the value of your home.
0 votes
Dan Tabit, Agent, Issaquah, WA
Sun Dec 30, 2012
First, the county assessment is not a reliable valuation. Your home could easily be worth more or less. County valuations are for tax purposes only and are approximate based on public records. If you have improved the home it wouldn't be considered by the assessor’s office.
I would suggest you meet with some local Realtor's and interview them to what they do to get you top dollar for your home and ask them what they feel the market could bring for it. Remember, the market set's the price, not you are the listing agent. There are various strategies to accomplish this, but don't fall for the agent who suggests the highest amount, this usually backfires.
Next, once you have an idea of the market value, meet with a lender or two to discuss financing options. There are 0 down, 3.5% down loan programs, but they all have conditions to consider. Closing costs can be paid by your seller, if they agree and the home you purchase will appraise. Again, your agent can discuss their best strategies to work out the details for you.
Best of luck.
0 votes
David Prouty, Agent, Lakeville, MN
Sun Dec 30, 2012

I wouldn't rely totally on the county assessed value. You should have a couple agents that serve your area do a market analysis of your current home.

As far as what happens if you are upside down, there are basically 2 options. Bring money to the closing to make up the difference, or, consider a short sale.

Both are not going to be attractive options, with the short sale option hurting your credit and preventing you from purchasing for the next few years (if you qualify and the short sale is approved). And bringing money to closing, if you don't have it, you have to try to convince a bank to do an unsecured loan.

As for the purchase of your next home, if you are able to get out of your current home with little to no cash at closing...unless you are a Vet, you will have to have at least 3.5% to put down. Closing costs can be rolled in, most of them anyway, you don't want to ask for to many "seller paids" and then leave it on the table.

I would welcome the opportunity to be one of the agents that does a market analysis on your current home to see what the market might be willing to pay.

Sounds like you have a lot of great questions, and a good Realtor can help you get those answered... that's part of the process:)

Just let me know.

Thanks, and good luck!


Broker, Owner, Realtor, CRS, GRI, ePro
Get a Rebate Real Estate
Lakeville, MN
0 votes
Donald James, Agent, Edina, MN
Sun Dec 30, 2012
Hi Frank,
You need a professional Realtor experienced in your area. Your Realtor will help you with current market value of your home. It sounds like you are considering a short sale. Only a few Realtors have the teams in place to help you with a short sale (where the bank accepts less than is owed). You should interview several Realtors and hire one who you feel you want to work with (after you have checked references on all.)
0 votes
Elizabeth Si…, Agent, Minneapolis, MN
Sun Dec 30, 2012
Good evening, USDA Rural Development and VA loans still have true $0 down requirements but if your next house will be in the metro area and not in a rural area USDA will not be an option and if not a veteran, a VA mortgage will not be either.

Fortunately, there are some programs that do not have a first-time homebuyer restriction such as through MHFA - Minnesota Housing Finance Agency (their down payment programs have recently changed) as well as neighborhood specific programs in Mpls & St Paul and other programs. But nearly all these programs require at least $1,000 of your own funds be invested into the purchase.

Do not fret about the county "assessment" information quite yet. Have the Realtors you interview prepare a market analysis for your property to get a good idea of the true market value. County assessments often are not in line with true values (sometimes higher and sometimes lower).

Feel free to contact me or another Realtor here on Trulia if you have additional questions, or you may post here in Q & A for a variety of answers to questions. This is an excellent resource! Best wishes!
Web Reference:  http://LizSibet.com
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Dec 30, 2012
First and foremost; you will not be buying another house, any time soon:
The waiting time, after a Shortsale, is presently two years.

Your first and best step would be to contact the LOSS MITIGATION DEPARTMENT at your Lender:
Assuming that you are not behind on your payments; your Lender may or may not help you. But you still have to communicate with them. They may ask you to write a Letter, explaining your predicament, and asking them for approval to hold a SHORTSALE. You will need their co-operation in this endeavor.
Assuming that they give you their approval; you will LIST the house, as a SHORTSALE, with a local Realtor. At that point, you will follow their advice as to Listing Price, Marketing, Presentation, etc.

Good luck and may God bless
0 votes
David O'Neil, Agent, Minneapolis, MN
Sun Dec 30, 2012
Those are some fairly complex questions. There are some FHA programs that might you might be able to use however, I would need a little more info from you with some more specific numbers on what you are looking to purchase. As far as the tax info is concerned, that is not a very accurate assessment as to the current market value of your home. Having a market analysis done by a realtor would help find the number your home will sell for in the current market.
If you would like to have a more in depth private conversation on this, please give me a call.

0 votes
Thanks for the quick reponse. I guess what I am looking for is how do I repay back what the house isn't worth...roll into new loan, take our personal loan...ect. What options do I have there? Also, I want to buy $100,000 house. Will the bank even approve me...I now have a few thousand in credit card debt and still paying on car and student loans and no money for closing or downpayment...
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