we owe 305K and condos in our village are selling for 280K. Do we wait it out or ?

Asked by Mem, Flemington, NJ Wed Jun 2, 2010

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18
ruby smith, Agent, San Francisco, CA
Wed Sep 15, 2010
what is your motivation to sell? do you have to sell? When you bought it did you envision staying there for 5 - 10 years? Then ask an agent familiar with your neighborhood
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Wed Sep 15, 2010
Janet, actually, you didn't "disagree" with me - you just said the word "hardship" - that was my point - a seller just can't arbitrarilty decide to short sell the home simply because they are upside down on the mortgage - a hardship, regardless of what it might be, generally has to be the impetus, and it is usually included as part of the short sale package presented to the bank. Then you need patience, time and perhaps even luck, for the bank to approve it.

Certainly no one would argue that Mem needs to know the consequences that a short sale would have on her credit.
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Janet Nation,…, Agent, Baldwin, NY
Wed Sep 15, 2010
Debbie,
I respectfully disagree with you, I have done a couple of short sales where there were no loss of employment or poor health etc and the homeowners were current on their mortgage payments If you want to move, you cannot be held hostage in your own home because the value isn't there. A skillful agent will help to determin the hardship. What Mem will need to understand is the consequences of what the short sale may mean to her credit, and that's another topic already addressed on this forum.
0 votes
Jerry Barker, Agent, Atlantic City, NJ
Wed Sep 15, 2010
Here is my 2011 Real Estate published online. It talks about a few of the details that may continue to pull down the value of real estate next year: http://www.suite101.com/content/the-2011-real-estate-outlook…
Web Reference:  http://www.sjrates.com
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Howard "Buck…, Agent, Clinton, NJ
Wed Sep 15, 2010
MEM,
Since so many answered, and this was re-born again yesterday and being that I'm a local agent in the Flemington area, I was just curious; what did you decide to do?
-Bucky

Howard "Bucky" Buchanan, SFR
Weichert Realtors
Mobile: 908-566-5547
Office: 908-735-2552 x208
eFax: 908-847-0239
http://www.buckybuchanan.net
Web Reference:  http://buckybuchanan.net
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Tue Sep 14, 2010
Mem.......Although this question was asked in June, and I already responded once - I just want to clarify what was just said.

First of all - if you "keep your mortgage current" - forget "minimal" - there won't be ANY impact or ill affect on your credit. That's the whole point of being CURRENT!

As far as short selling your home - a short sale is not just something one decides to do , and does it!
You'd need to show some kind of hardship (due to loss of employment or health issues, etc). It's not just something you can decide to do becauese you want to do it!!!.......and even if you do have a hardship, it isn't easy to get a short sale to closing, so it's no sure thing.

If you don't need to sell now, don't.
If you can afford to keep paying your mortgage - do so.
If you sell now, you will lose money, and may have to make up the difference out of your savings, or other assests, in order to make it to the closing table.

Best wishes.........

Debbie Rose
Prudential NJ Properties
0 votes
Janet Nation,…, Agent, Baldwin, NY
Tue Sep 14, 2010
If you are planning to stay in your condo long term, I wouldn't worry about it. If you really have to move in the next year or so well then you might as well face the music now and short sale your home, why delay the inevitable. If you keep you mortgage current, it may have minimal impact on your credit.
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Jessica Worm…, Agent, Oldwick, NJ
Tue Sep 14, 2010
A very high level answer to your question is - will you make up the loss when you purchase your next home? The answer is, very likely, yes, you will make it up. You have to look at the big picture, not your immediate loss.

For example, if you lose 10% on the sale of your home, you want to make sure you GAIN 10% on the purchase of your next home. If your "future next home" has historically sold for 400K, you want to make sure you can get this house for 360K or less. Depending on where you are looking to move, this is very possible.

Please email/call/text me with further questions!

Jessica Wormeck
Weichert
cell: 908-938-6535
realtorjessica@gmail.com
0 votes
Nathan Colmer, Agent, Beach Haven Terrace, NJ
Sat Jun 5, 2010
Also, remember the additional costs (comissions, transfer tax, etc) so the loss would be far higher thn $25k even if you sold for full price...
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Nathan Colmer, Agent, Beach Haven Terrace, NJ
Sat Jun 5, 2010
If you can afford to wait, why sell at a loss? The market will improve and provided the condo does not place any undo stess on you or you family, I would rent the unit and sell when the market improves.
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Thu Jun 3, 2010
Hi Mem:

You should factor in the following:

1.)your time frame that you have in mind (another 3 to 5 years or next year).
2.) how much equity you have in the property
3) Can you refinance and take out the equity
4) Can you rent it out and how much can you rent it out
5) What is your Credit Score and Job situation
6)If you sell will you be short

Good luck.
Perry
Web Reference:  http://www.ruthandperry.com
0 votes
Deborah Madey, Agent, Brick, NJ
Thu Jun 3, 2010
Chances are greater that the market will not rebound t cover that difference in the short term. Should you move? It depends upon how much the move will mean to you. Using your numbers, is the 25K cost worth the anticipated gain? Do you need more space? A different location for schools? commuting?

People have different reasons for moving and whether or not the changes a move can bring to you are worth 25K is a question only you can answer.

It is unlikely the market will rebound and that you will see a 25K increase in the short term. If you decide to wait it out, it may require more than a few years.
0 votes
Marc Paolella, Agent, Succasunna, NJ
Wed Jun 2, 2010
Jerry,

This article proves nothing. If the economy improves and the job outlook brightens, which usually happens after a recession, then most of these loans will never become delinquent. The bottom line is, real estate prices cannot be predicted beyond a few months. Too many things can and will change. So a 20 year doom and gloom forecast is worth less than a mortgage pre-approval.

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Web: http://www.marcpaolella.com
0 votes
Jerry Barker, Agent, Atlantic City, NJ
Wed Jun 2, 2010
If by wait it out you mean 20 to 30 years or more. Heres an article that explains why real estate may continue its decline in value steadily over the next 10 years or so: http://mortgagesloans.suite101.com/article.cfm/foreclosures-…

Read my 2010 Real Estate Outlook here: http://flipping-real-estate.suite101.com/article.cfm/2010_re…
Web Reference:  http://www.sjrates.com
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Wed Jun 2, 2010
Mem, I am going through this very issue with a client of mine.
Their condo is worth, maybe 300,000......they paid 375,000 5 years ago............they are not happy campers, and I feel for them - and you. They do not want to take such a huge hit at this time, yet have grown out of their condo, and need more room (2 babies will do that to you!).

They are considering renting it out for the time being, even at a small loss monthly.
The question I posed to them (and now to you if renting is a possibility) is can they handle being a landlord for more than a year - or even a year - as the numbers are going to take more than 1 year to catch up to what they paid, Being a landlord has it's own list of pitfalls and requirements, so you have to be prepared for that, too.

To answer your question specifically............can you afford to wait it out? If you don't HAVE to move, then remain where you are. Just know that it will most likely take more than a year to make you whole on the price.

Best wishes,
Debbie Rose
Prudential NJ Properties
0 votes
Joan Congilo…, Agent, Freehold, NJ
Wed Jun 2, 2010
Hi Mem,
Based on what you owe if you sell it for $280,000 you will need to bring $25,000 extra to closing just to pay off your mortgage & that is without your closing costs & real estate fees. So unless you have extra savings to cover all of these expenses I'd suggest you stay for a few years until the market stabilizes.
Web Reference:  http://www.joancongilose.com
0 votes
Howard "Buck…, Agent, Clinton, NJ
Wed Jun 2, 2010
Mem-

That is a decision that you need to make, based on a lot of information. Do you need to sell for relocation or work? Do you need to move due to family changes? Is it a financial drain currently? Or are you just looking for getting out from under your current place? Like mentioned before, who knows where the local market here in Flemington will go, but it would appear that things have stabilized. I wouldn't anticipating a $25k increase in the coming months, unless you have that one property that someone really really wants/likes.

The other question is one of your own credit. Would you be willing/able to make up the difference between selling price and the amount you owe on your mortgage? Or would you be looking for a short sale approval from your bank? Or just walk away and going into foreclosure? Again, those are all personal decisions you need to make based on your situation.

I'd advise you check with a local realtor, as well as your tax and legal advisors, before you make any decisions. Best of luck to you!

Howard "Bucky" Buchanan, SFR
Weichert Realtors
Mobile: 908-566-5547
Office: 908-735-2552 x208
eFax: 908-847-0239
http://www.buckybuchanan.net
Web Reference:  http://buckybuchanan.net
0 votes
Marc Paolella, Agent, Succasunna, NJ
Wed Jun 2, 2010
Hi Mem,

It's your choice. I would not expect any significant property value appreciation for the next few years. So if you believe that is correct, the decision is one of lifestyle and financial ability. If you want to move, and can afford the hit, you move. If not, then you stay.

Good luck!

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Web: http://www.marcpaolella.com
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