Home Selling in 55442>Question Details

Julie, Both Buyer and Seller in 55442

I own a 2 br condo in Plymouth MN with my husband- bought in Feb. 2006, owe $106,000 on it. The most recent

Asked by Julie, 55442 Mon Aug 24, 2009

unit sold for $88,000 in May. There are currently 6 other units for sale.

I live on the top floor (3rd floor) with no elevator and am pregnant with twins. We are out of room and soon I won't be able to walk the stairs.

What can I do to get out of this condo? We can't pay the difference between what we'll get and what we owe but need to buy a home for our growing family.

Help the community by answering this question:


Julie, you've gotten a lot of advice about how to get out but if you do in fact short sale your home, you and your husband probably won't be eligible to buy another home for two to three years.
If your current lender agrees to a short sale it most likely will be reported as "settled" on your credit report. Under current guidelines, a lender would treat that the same as a foreclosure.
Here's hoping you can get your condo situation resolved. If you do it will be imperative you keep your credit spotless after the short sale or the time frame when you can own again will be that much longer.
Good Luck!
0 votes Thank Flag Link Fri Aug 28, 2009

First and foremost, congratulations on the twins! As a father with a little one at home and another on the way I can assure you that this is a wonderful and exciting time in your life. Every time I walk through my door at home it’s like a rock star stepped into the room. Hugs and kisses for Daddy will never get old. Don't let your housing situation spoil all the fun:-)

You are receiving many good suggestions here but I wanted to chime in with some unbiased information. I am not a Realtor® that sells in your market however I am an experienced short sale negotiator.

There have been references to "hardship" and "deficiency judgments" on your answer thread. A short sale occurs when a homeowner owes more on their property than the property is actually worth, but their bank agrees to accept less than what is owed against a property. The lender may agree to a short sale but require that a deficiency judgment be issued for the net balance remaining. The goal for a good short sale negotiator is to get the bank to accept the reduced amount as "payment in full" with no deficiency judgment. Succeeding at a payment in full negotiation is often correlated to the level of hardship being incurred by the current owners. Death, divorce, loss of job, drop in income and yes maybe even pregnancy can help demonstrate hardship.

When you purchased your property in 2006 were you working? If so was your income calculated into your qualifications? Do you plan to leave work to care for the twins for any length of time? Have your monthly expenses increase since you purchased your home? Do you have an FHA mortgage? The answers to these questions might help a successful negotiation of a short sale. The bottom line is the more you can convince your lender that your financial situation may be strained and is more likely to get worse before it gets better, the better your chances of a short sale payment in full scenario. If you have an FHA mortgage, HUD has an up front hardship approval process. This process will allow you to determine if you qualify for "hardship" before you invest any time or effort into marketing your home and securing a potential short sale buyer. I have attached a link to some of the National Association of Realtors® short sale resources.

If you anticipate having difficulty convincing your lender that you have, or anticipate having in the near future, financial difficulty, you may want to go the route of renting your unit. Depending on the local rental market you may be able to offset most of your current monthly housing expense with rental income. You may still be losing money each month but it may be a manageable amount leaving you in a position to rent or possibly purchase a more suitable home for your needs.

If you have any specific questions or want to share some more info on your specific situation, feel free to reach out. I will do my best to point you in the right direction. Good luck!
0 votes Thank Flag Link Thu Aug 27, 2009
Hi Julie,
Keep the condo. Save up 20K to cover the difference. Good Luck
0 votes Thank Flag Link Thu Aug 27, 2009
I did some more checking. I hope this does not generate a lot of calls from my fellow realtors to you. The unit you are referring to actually sold for 84k after closing costs. It was on the main floor. Another 1 bedroom sold for 49k. The price floor in the building is 69k for a 2 bedroom. It is a short sale, owner paid 125k, that may not fly with the bank. It did not see if it was approved. The Realtor took it down from 79k right away. Indicates bad market feeedback. I think you are in serious trouble in that buiding. Condos, TH's can be very building specific. Your worst nightmare is the 3rd floor, no elevator. No pets, and a high association fee. All our of my original suggestions are still on the table. You will probably need more than 50k from the relatives to get out. Rentng is the next best option, you will need to check with the association. The third floor will be a stumbling block. For all who are buying Condos, the location in the building is as important as the location of the building.
0 votes Thank Flag Link Wed Aug 26, 2009
Everything should be on the table, Moms, Dads, Grandparents ask for help, first. This is a wrong place, wrong time situation for most who bought after 2003-4. It just happened, not to take it personal.
Second on the table. Twins in one bedroom , the two of you in the other. It might be hell, but so might selling. Third on the table. Rent it, check out the situation in your building, we are running into associations limiting renters. No elevators, third floor, big negative. Pets ok? Big issue. I have 1 bed listing in SLP, no showings, no action at opens.
Last resort, short sale, foreclosure. You have to show hardship, you got me on the too small issue, 2 kids
chances you will not get approval for a short on those circumstances. The rules change on a daily basis.
You will damage your credit 1-200 pts. Someone who has serviced a loan should answer what it means on the loan side.
You can do a Contract for Deed. You will have to evalute the house carefully, it might be a foreclosure flip situation. Best out, relatives all pitch in and cover the shortfall. Figure on around 7% to sell. You will need some cash on the buy side. Plenty to rent. Schools will be an issue in 3-5 years. We live in plymouth.
0 votes Thank Flag Link Tue Aug 25, 2009

You are in a situation which is familiar to many homeowners in the Twin Cities today - you are underwater on your current home (financially) and have a compelling reason to move. The condo/townhome market is not exactly "robust" right now either.

A short sale on your current home may very well lead to either (a) a deficiency judgment against you (you will owe your lender the difference between the selling price and what you currently owe) and/or (b) a damaged credit score - which may not allow you to purchase a home which better meets your current and future needs.

Have you looked into renting your current condo? It might be that renting the condo and (perhaps) renting a larger, single-family home might better solve your problem without damaging your credit or giving you a large balance to settle with your lender. I know it doesn't involve buying or selling real estate, as this site is usually a vehicle for, but it might be your best option in the current market. When conditions improve, you could sell the condo and purchase your next, larger home.


p.s. Kim's link to AFM7 is a good reference for info on the short sale process.
0 votes Thank Flag Link Tue Aug 25, 2009
You've been given some good & scary advice here. To get honest legal advice, please contact a 'seasoned' short sale attorney, not just anyone. You may search for one or contact Bill Keyes at http://www.AFM7.com here in the ciites as that is their specialty and you'll get non-biased advice.

Kim Eisen
Realtor since 1980
(651) 457-HOME (4663)
0 votes Thank Flag Link Tue Aug 25, 2009
Hi Julie:

It is very likely you will not get more than you bought it for. NOW is the time for you to try to sell it - while the $8k first time home buyer tax credit incentive is being offered. By the time all expenses are paid (i.e. closing costs, commissions, etc) you may be in a short sale situation - meaning more is owed to the bank than you can get for the property depending on how much you still owe on it. I would love to talk to you more about this - feel free to call my office at 612-821-7183. Best wishes, Jack:-)
Web Reference: http://JackieFunk.com
0 votes Thank Flag Link Tue Aug 25, 2009
You can talk to your bank about doing a short sale however in almost all cases that will prevent you from buying a new house for 2-3 years.

If you need to buy a new house you will almost certainly need 3.5% as downpayment.

You could consider getting a loan from parents to pay the difference on the condo.

In the end, this is a debt you are obligated to pay and anything less than paying it off in full will likely have other consequences for you.
0 votes Thank Flag Link Mon Aug 24, 2009

You really need to sit down with a real estate agent and discuss your financial situation with her regarding the condo. A short sale might be your best option, but may not as a short sale can hurt your credit for two years. I have experience with short sales so please feel free to give me a call with any questions! It will be hard for an agent to answer your question without knowing specific information, that I doubt you want to share online.
0 votes Thank Flag Link Mon Aug 24, 2009
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