what happens if i sell my home for less that i owe?

Asked by bethinchicago, Chicago, IL Fri Aug 24, 2012

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Jorge Vega, Agent, Chicago, IL
Fri Aug 24, 2012
Only two options are left in this case:

Short Sale

Come to closing with difference

If you have the money then chose option two, if not hen chose option one. If you are eligible for a short sale then you can walk away without having to pay the difference. If you need more advice please feel free to contact me. Good luck!!!
1 vote
amelia22brown, Home Buyer, London, OH
Fri Aug 31, 2012
You have to handle this situation as:
if you have urgent requirement of money then it will be good for you to sale,butif you dont have that much requirement try to avoid selling your property.The property rates are increasing exponentially , you have to wiat sometime rather than selling it in Low price.

Plaza estates agent can help you to find the best buyers for your property.This firm help you to find the best homes in real estate London http://www.plazaestates.co.uk/
0 votes
Keith Jackson, Agent, Chicago, IL
Fri Aug 24, 2012

While your situation is less than ideal, it is a situation facing many "Chicago-land " dwellers. You have 2 options:

1. If you can afford it and have the resources, you can bring the difference between your sales price and what you owe on the mortgage to closing. This option obviously cuts into your cash reserves, but it will leave your credit unblemished.

2. You can try to execute a short sale. I use the word try because you must have a compelling and "documentable " reason for requesting a short sale. Your mortgage company has to review any offer you receive and review the reason behind why you are "selling short". If they determine that your reason is valid, they may accept a short-sale offer. While this is great news for you selling your home, there is a penalty to be paid in a derogatory item on your credit report.

I have extensive experience and a thorough team of short sale attorneys that aid me in successfully completing short sales. If you would like to discuss this matter further, please do not hesitate to call me at 708-932-1352.


Keith Jackson
REMAX Synergy
0 votes
Bill J Delig…, Agent, Naperville, IL
Fri Aug 24, 2012
If you owe $100k and sell it for $75k, you have to come to the closing with the difference, unless you qualify for a Short Sale. In a Short Sale you bank will qualify you and if you are approved they may cover some or all of the difference.
0 votes
Philip Sencer, Agent, Chicago, IL
Fri Aug 24, 2012
You will have what is called a Short Sale that needs the approval of the lien holder or you can write a check at the closing for the differeince
0 votes
Matt Laricy, Agent, Chicago, IL
Fri Aug 24, 2012
You can come out of pocket the difference, or you can short sell it.

Speak with a good realtor about what they can do to help.
0 votes
Randy Schule…, Agent, Saint Charles, IL
Fri Aug 24, 2012
Understood Beth. Regardless, if you'd like to speak with a professional about this, at no cost, call me at 224-805-2616.

Randy Schulenburg
Managing Real Estate Broker
Mortgage 1st Realty, Inc.

0 votes
bethinchicago, Home Seller, Chicago, IL
Fri Aug 24, 2012
Thanks for the replies. Actually, I didn't mean to post this as a question; I mistakenly thought I was typing in a search field (and now that the question is out there, misspelling and all, Zillow won't allow me to delete it).
0 votes
Randy Schule…, Agent, Saint Charles, IL
Fri Aug 24, 2012

Check out my blog on Trulia and you will see this specific question answered. For additional questions and to also be referred to a real estate attorney on my team, call me at 224-805-2616. In the case of a 'Short Sale' the attorney and real estate fees may not be paid by you but by the Lender who forgives you of the amount you couldn't pay off through the sale.
0 votes
Evelyn S. Fr…, Agent, Chicago, IL
Fri Aug 24, 2012
Hi Beth,

I guess the best place to start is to ask if you are on market and have you received an offer? Then did you list as a short sale? If so, then all parties should be aware that the house is being sold for less than owed and the bank should be working with you to achieve the closing.

Moving on...If you are not selling as a short sale the big question is are you in a position to pay the difference between the selling price and the pay-off amount?

If you sell as a short sale your atorney should be working to get you a "forgiveness of deficiency", something along those lines of language. After all is said and done your credit takes a hit but not as bad as a foreclosure and you should be able to purchase another home within 18-24 months, give or take.

If you woiuld like further assistance please don't hesitate to reach out to me directly.
0 votes
Jose Hernand…, Agent, Chicago, IL
Fri Aug 24, 2012
Hi Beth,

Unfortunately many folks are in the same position, here's a couple of options.

1. You will have to pay the difference at closing, if you have the money available.

2. We can negotiate with your bank to approve a short sale, depending on your situation the bank might agree.

If you would like to get more information feel free to contact me at anytime.

Jose Hernandez
Coldwell Banker
0 votes
Terry Farnsw…, Agent, Lisle, IL
Fri Aug 24, 2012

You can sell your home for whatever you choose. You would need to personally come up with the difference between what you sold your home for, and the amount you owe - at the close of escrow.

Your other option, should you be able to prove a financial hardship to your lender, is to apply for a short sale. If you have any questions, please let me know!

Terry Farnsworth
Prospect Equities Premier
0 votes
Lucid Realty…, Agent, Addison, IL
Fri Aug 24, 2012
1) If you can afford it you come up with the cash to pay the difference.
2) if not you try to get your bank to approve a short sale, where they accept less than the payoff amount. But this hurts your credit score for a period of time.
Web Reference:  http://LucidRealty.com
0 votes
Laura Rivera, Agent, 60622, IL
Fri Aug 24, 2012
That would be a Short Sale. What "happens" depends on your personal situation.

Feel free to contact me for further details.

Laura Rivera - Broker Associate/Realtor

Si, yo hablo español!
First Class Service Because it Matters to Me
Betancourt Realty
2041 W. Division Street
Chicago, IL 60622
Cell: 773-750-4311
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