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Well, it seems I'm stuck in Michigan. As you can probably imagine, things are not good here in terms of real estate value. My wife and I bought our house 10 years ago for $175k, and it seems now, after talking with many agents around here it will sell for $130k-$140kish (trending down). This give me a stomach ache...
Now, the good. This job offer is very secure, perfect job for me, great environment (both work and family), etc... Out of all the job interviews / offers I've had, this is off the charts in terms of excitement! My wife and I are both ready to go, my daughter is not school age, so now's the time.
Back to the doom and gloom. Any one who is in Michigan is somehow connected to the auto industry - i'm no different, I work for Ford. People are leaving here in droves. Although I'm hopeful for the future, and I can kind of see the turn around happening, it's really taken it's toll on the area. So, on to my question: Although the relocation package offers full benefits in relation to the move, and help on closing / real estate costs, they will not buy houses (or even cover losses). Our equity after 10 years is gone, and in fact we are in the red (house worth less than we owe) by about $10-$20k in my estimate. Are there any creative ways to get out from under our house to make this move? Of course renting is an option, but we just dumped $20k into the house doing a kitchen / addition gut and redo, and it would kill us if bad renters messed the house up - or even worse, took all of our GE Profile appliances! I've heard about the "short sale", but I don't know how much it would affect our credit. I've also heard about the "mortgage forgiveness debt relief act of 2007" but I'm not sure if I understand it's intent or if it would even apply to our situation.
I really want to take this offer, but all signals point to me declining simply because of the housing issue. Our house has become a boat anchor! Are there any creative options that I can employ - something that I haven't heard about perhaps? Something that will allow me to make this move without 1) ruining my credit, 2) having to moth ball the house, or 3) renting it? My wife and I want to have a clear conscience when leaving - to look toward the future, ya know?
Can you rent your house out in MI and rent in NJ? A friend of mine is in the same boat. He bought a house in CT and it dropped 200k so he's renting it - losing a little $$ every month but pretty much paying his expenses and he's renting a house for his family in CA. Before the market crashed and 3 years ago we moved from MI to CT and we lost a little on our house but DH's new employer gave him a signing bonus to make up for it.
I know times are much tougher now but maybe you could get something from your new employer to help you out. Since your potential employer is willing to pay closing costs you won't have to pay the agent's commission and on the buying side you'll also save. We figured out our relocation package was worth about 200k and that was 3 years ago. You maybe better off selling and negotiating a signing bonus that would help cover your loss. Don't forget the loss will help w/ your taxes and is carried over until you use it up. I'd take the offer - most eveyone thinks things are going to get worse before they get better.
Good Luck - It's tough in MI and we are really happy we moved out 3 years ago!! My 4 sibs are still in MI and they all sound really depressed.
what is your gut feeling? I mean first do you know anything about the area your moving too and how secure is this new job? Look if this is a dream job, and you said excitment off the charts, which is so hard to get a job you actually want to do and like this is really a no brainer. You spend more time at work than in a house. A house is just a house, a business decision. If you got a great offer and a great job that YOU WILL LIKE who the heck care about the money. I mean if your unemployed there is less money anyway. I mean I think in order to be happy in life a job is very important and unless things do turn around which you dont know, I would dump the house and move and get a good job and look for the deal of century provided your happy in NJ.
Are you working now? DO you love your job? Whats going on in your life now? Do you have anything going for you in MI? These are all question but who cares about a loss of money when you need the health insurance anyway. Look at it this way without all that health insurance for your family each month your making more money. I would just dump it and move on. Thats my opinion. Or you could rent in NJ, hold on alittle while to see if its a good fit and then make that decision on what to do with the old MI house.
And what about finding that great job in MI? Is that possible.
Been there done that. Lived in Cleveland, OH and could not sell house for decent $$. Not as bad equity wise as you but I got sick of bleeding $$ every month. Owned 15 years. Got a check for whopping 6K net when I gave away my house just do dump it. Sigh.
And I lived in Ohio which is a boom state compared to MI.
Where in NJ is your new job? And as someone mentioned, how do you feel about how secure the new job would be as compared to your current job?
First obvious answer is whether you can simply make up the difference on the loan. Sounds like you don't have the money for that, but it would be the cleanest way to repay your debt and move on with your life.
I think a short sale would be a ding on your credit, but I don't think it would "ruin" your credit, and over time you could build it back up again. It might take some time to process though, so as you think about your options if you are considering this you should waste no time in getting started.
Also, I'd recommend lining up a rental place in NJ before you do anything that would hurt your credit, because they typically would run a credit check on you.
And it goes without saying that you shouldn't buy right away when you move here. First of all, renting for at least a year is the best way to get to know the area so you can decide where you might want to live. Also gives you a chance to get a feel for the new job and the area in general to confirm your decision. Second, you could end up underwater on a second house which would start to approach the "ruin" on your credit if you needed to move again.
1. NJ is probably a good move for you, because the job market here and in NYC is alot stronger than Michigan (depending upon your industry), so you may want to seriously consider taking that job.
2. You could list your home "for rent" with a Realtor, and they can require ALL rental prospects to be screened via credit check, rental application, references, etc.
3. If worse comes to worst, sell your Michigan home and take the $10K-$20K loss if you can afford it. This way you're guaranteed to be free & clear of the obligation of the home, you save your credit and you can start anew once you get settled.
4. If you can show proof of a legitimate "financial hardship" (i.e. loss of job, mounting medical bills, etc) and if you happen to be in the rears on your mortgage payment 4+ months, you can list your home with a Realtor, get a contract on it from a buyer, and present the offer of sale to your mortgage lender with hopes that they'll agree to allow you to do a "short sale" (aka pre-foreclosure). Short sales don't hit your credit as hard as a full-blown foreclosure does.
I would short sale the house asap! I deal with people relocating and have encountered this issue many times. Feel free to call me directly if you would like more information on your options: 248-670-4064
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