Home Selling in Warren>Question Details

Peggybabs, Home Owner in Warren, MI

We owe more on our House than it is worth.If we sell it at the price the house is worth do we pay the rest that is owed?

Asked by Peggybabs, Warren, MI Mon May 21, 2012

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I checked my USSA account and it listed my house value. Makes me sick.
0 votes Thank Flag Link Sun Aug 9, 2015
It is A VA Mortgage and we would like to be free of it. What happens if we just quit making payments.
Flag Sun Aug 9, 2015
Depends on the lender in question and if they will qualify you for a shortsale or not. Speak directly with your lien holder for the most accurate answer.

Christopher Pagli
Accredited Buyer Representative
Licensed Associate Broker
William Raveis Legends Realty Group
0 votes Thank Flag Link Sun Jul 29, 2012
I am sorry for your situation and can completely relate as I am in the exact same position along with many other people. I don't know for sure but I have heard that until the end of this year, you can walk away from your home without penalty because so many people are upside down on their homes. Also, many banks are willing to renegotiate the terms of your mortgage. You will need to have it professionally appraised and will probably also need an attorney. With the interest rates so low and property values in our area really bad, you could end up with a much lower payment every month. Just make sure that you do your research and get someone reputable on your side, don't just call a number you see on t.v. Also, if at all possible, don't fall behind on your mortgage payments because if you keep your payments current and credit score good your chances of renegotiating will be better. Good luck and I hope this helped.
0 votes Thank Flag Link Sun Jul 29, 2012
First I like to express to you that you are not alone ....
How did you determine that you owe more than your home will potentially sell for?
If you got a good market evaluation from an experienced Realtor, which you should get,
then you will know the very bottom line of what in this market your would could and probably
will sell for, that agent then also can figure out what your closing costs will be and any other
outstanding payments (may be taxes .....)

Then you have exact numbers to think about.....

If truly let's say you owe to the bank (I am making these numbers up) 500 K and the Realtor
shows you with comparable properties that have recently sold that it will not sell for more
than 375 K to 395 K, then you are app. 125 K short plus closing costs.... and the answer to
your questions is YES if you do sell, and the final sale price less commission to the Realtors and
closing costs does not cover what you owe the bank then you have to bring that lacking amount to
the closing table....

Now the question to discuss in detail with your Realtor is what other options you may have,
depending on your personal situation (short sale? etc.)

Hope this helps, but do not make the decision on your own discuss it with an experienced long time and local Realtor/Broker.
All the best to you!
EdithSellsHomes@gmail.com - Any real estate questions (buying, selling or investing)? E-mail me a get a detailed response ASAP no obligation just great information. :)
0 votes Thank Flag Link Mon May 21, 2012
It depends. If you do the traditional sale, yes you do. You need to bring the funds to the closing table otherwise, it won't close. Remember, the house is the collateral of the debts you owe. However, If your bank agrees that you can do short sale, then you may not. You may choose a realtor who is well acquainted of the short sale process and who has in her team a Loss & Mitigation (law firm) that will help facilitate the short sale process for you. You may ask them about the deficiency judgment and how to avoid it. You need to have them protect you from the bank who will most likely send you a 1099 of the deficient amount during the tax time. Good luck!!
0 votes Thank Flag Link Mon May 21, 2012
This all depends on your situation. If you don't have a financial hardship such as loss of job, reduction in income, illness, divorce, etc. and if you have the cash to pay the diffierence, this could be your best option. Your credit would remain in tact and you can move on to another real estate purchase.

If, however, you sincerely have a hardship and can prove it, then a short sale may be your best option. Whether or not the lender would ask you to pay back any of the shortfall is not possible to answer without knowing your entire situation. A question like this cannot be reasonably answered on a forum like this. You would need to sit down with a real estate profession who is well versed in short sales. This would allow you to explore all of your options.

If you want to talk, feel free to give me a call at 248-930-0198 or visit one of my websites for more answers.

Kathy Persha, Realtor
Keller Williams Realty

0 votes Thank Flag Link Mon May 21, 2012

The information you're received is good and Ron did touch on one point that is very important, the letter stating that your debt has been forgiven and you owe nothing more. If you speak to an attorney to handle the Short Sale or work with a Realtor you must get that in writing. Michigan can hold you responsible for the deficiency.
My company Real Living Kee Realty does have attorneys that handle them. No matter which way you go you will still have to get the property listed for sale by a Realtor. If you did a Short Sale that is something that would be noted in the listing information. You as the home owner would accept an offer but the final determination would be the bank. You also have to take into consideration if you have a scond mortgage. I'm not sure your reason for moving but maybe you can speak to the bank about a loan modification

Good luck,
If you need additional assistance feel free to contact me.

Pam Bava, Realtor
0 votes Thank Flag Link Mon May 21, 2012

I would love to come over your home to go over the whole short sale process. You can have the debt forgiven if your bank agrees to the short sale offer terms. You need to have some kind of hardship, such as divorce, sickness, or loss of job to qualify to have your debt forgiven. If you just walk away from the mortgage, you may be sued for the difference between what you owe & what the bank will net from the proceeds of your house. This may be the last year you can do a short sale & not pay income taxes on the debt that has been forgiven you.


Sigrid Garrick
E-Pro & SFR (short sale foreclosure resouce) certified Realtor
0 votes Thank Flag Link Mon May 21, 2012

There is more than one answer to your question. Yes if you wanted to pay the balance of your mortgage off after selling it, you could do that. Or you could Short Sale your home and have the bank agree to discharging the balance.

If you decide to Short Sell your home, there is no guarantee that the bank will just discharge the balance, but depending on the bank, they very well may. We are the experts in Short Sales in Michigan and we have helped many people get out from under their underwater homes.

It won't hurt you to call or stop in to talk to one of our Short Sale consultants to weigh out your options, it's free and it will give you a piece of mind as to what your next step should be.

My contact information is below, so feel free to call, text or email me as soon as you can and we can help you.

Thank you,

Elias Realty
(248) 379-6547
0 votes Thank Flag Link Mon May 21, 2012
This is not a simple question, nor answer:
The local and State regulations come in to play.
Michign is a RECOURSE state, meaning that, as a rule, the Lender can come after you for a Deficiency Judgement. This would be the case whether you do a Shortsale or a Foreclosure.

There may be exceptions, or other ways to handle this; and for that info I suggest you contact a Real Estate Attorney.
One question you can ask; if you did a Shortsale, or a Deed-in-Lieu, could you get a letter exempting you from further debt (Deficiency Judgement)?

Also, are you just under-water, or do you have a serious hardship?

Good luck and may God bless
0 votes Thank Flag Link Mon May 21, 2012
You would either have to do a short sale or bring the difference between what you sell it for and what you owe in cash at closing.

If you need more information on how a short sale works just give me a call or send an email and I'll be happy to explain the process to you.

Have a Great Day!!

Karen Paytas, GRI, CMS
Real Living Kee Realty
0 votes Thank Flag Link Mon May 21, 2012
Yes, that is how it would work, unless you get an approved short sale from your lender.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Mon May 21, 2012
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