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So I have a condo in the heart of Brandon, its a 2bdrm/2 bath 916 sq.ft. second story condo with a great lake view. I'm very underwater on my mortgage- payoff is $93k and its Zillow value is $44k.
Since I bought a house back in January and can't get anyone to even rent my condo should I just stop making payments all together and let it go into foreclosure or short sale? If so can the banks in FL come after me for the difference lost? I mean since I bought a new home and have money in the bank and own two luxury new cars.
So I have a condo in the heart of Brandon, its a 2bdrm/2 bath 916 sq.ft. second story condo with a great lake view. I'm very underwater on my mortgage- payoff is $93k and its Zillow value is $44k.
Since I bought a house back in January and can't get anyone to even rent my condo should I just stop making payments all together and let it go into foreclosure or short sale? If so can the banks in FL come after me for the difference lost? I mean since I bought a new home and have money in the bank and own two luxury new cars.
Really need the advice, thanks.
You need advice from a foreclosure attorney.
On here, your going to get a lot of advice from real estate agents. Obviously they will all be telling you to pursue the short sale. Short sales only benefit real estate agents. They get the commision, your credit still gets wrecked and you still have to deal with a ton of hassle from the bank.
Your also likely to hear from the 'do-gooder' crowd, trying to lay the moral high horse arguement on you. Let it go in one ear and out the other.
Your best bet is to probably rent the condo out for whatever you can get AFTER you stop making payments. You can probably get several years worth of rent payments out of it after you stop making payments.
The upside is that you get several years worth of rent payments while the attorney makes the mortgage holder prove their case in court. The downside is that your credit will take a hit. Big deal, the money you will make on the condo, should more than make up for whatever credit hit you will take.
As I said before. Contact a good foreclosure defense attorney. They will help you shield your assets and make the best financial decision.
Short Sales only benefit a Real Estate Agent?? Oh Man!!
The thing about the Internet is that it makes EVERYONE an EXPERT! If the price as 60K, a Real Estate Agent would get between 2.5% and 3% commission from any kind of sale. Short Sale, regular sale, or bank owned foreclosure sale. So having you short sale it doesn't do anything. The bank still has to agree to whatever you short sale it for and if you have two luxury cars and house, I would feel pretty comfortable saying they will not allow you to short sale. I could be wrong, but you have the money, you choose not to pay.
4 years ago when this housing mess started, I felt strongly that you bought, you pay! But I see it more as a business decision now. Can the bank come after you for the difference of what you owe? Yes, they can. Will they, depends on the amount. With your payoff of 93K and say you sell it for 70K, I don't know if 23K is worth them taking you to court and all that. I would just be honest with the bank and see what they say. If you are going to give them back an asset in good shape, that they can sell for the best price to avoid the trouble of foreclosing and all that, they may do it.
I know a Real Estate Agent that was trying to short sale her house two weeks ago. I had someone that wanted to go see it and put an offer in. The bank said no deal on the short sale because she had never missed a payment.
PLEASE NEVER believe what ZILLOW says. It is a tool, that is it. The Zeestimate can easily be off by 10's of thousands of dollars. You want to know what your CONDO is worth for free? Ask a realtor in your area to work you up a Comparative Market Analysis or CMA. That will give you a pretty good estimate. You want to know exactly what it is worth, pay the 300 dollars and have it appraised by a certified professional.
I am curious as to why nobody wants to rent it. Are you asking too much? Rentals are being scooped up very fast by people that need to rent, because they can't buy.
Let's say your monthly cost for the CONDO is 1200 per month to you. It would almost be better to rent it for 900 per month for the next couple of years so you don't destroy your credit. You lose 300 per month, but you also continue paying down the amount you owe on the CONDO and it gets closer to being paid off.
Have you ever thought about selling it yourself or leasing it long term? Charge someone 5,000 to move in for a 5 year lease with requirement to purchase at the end of the 5th year. You owe 93K now, but if the leaser pays each month, that 93K goes down each month for the next 5 years. At the end of the 5th year say the balance is 46K. Now that leasor buys the property for 46K, your note is cleared, that leaser that can't afford to buy now repairs thier credit over the next few years and isn't renting.
Just a couple options for you. But I would NOT quit making payments unless I was willing to take that credit ding. You have a house and vehicles now, but you will want to buy something someday. I am hearing people are losing well over 100 points on the FICO and if your next loan is 2% higher than these, you will end up paying for that CONDO in a different way.
On here, your going to get a lot of advice from real estate agents. Obviously they will all be telling you to pursue the short sale. Short sales only benefit real estate agents. They get the commision, your credit still gets wrecked and you still have to deal with a ton of hassle from the bank.
Your also likely to hear from the 'do-gooder' crowd, trying to lay the moral high horse arguement on you. Let it go in one ear and out the other.
Your best bet is to probably rent the condo out for whatever you can get AFTER you stop making payments. You can probably get several years worth of rent payments out of it after you stop making payments.
The upside is that you get several years worth of rent payments while the attorney makes the mortgage holder prove their case in court. The downside is that your credit will take a hit. Big deal, the money you will make on the condo, should more than make up for whatever credit hit you will take.
As I said before. Contact a good foreclosure defense attorney. They will help you shield your assets and make the best financial decision.
What a BS! First of all "short sales benefit real estate agents..."
You should have said; "a short sale benefit the seller/owner!"
The realtor gets paid in any sale so it doesn't matter if it is a regular sale, short sale or foreclosure...and btw a short sale is usually more time consuming for the same money...at least if you are on the sellers side and not a lazy realtor who lets a buyer pay for someone else to do the work!
Having said that...any decent real estate lawyer will inform an owner that short sale will cause the least damage to your credit score and takes the shortest time frame to recover from your credit score hit.
Overall in a short sale the remainder will be forgiven or a small note needs to be signed by seller which can be paid in partial payments.
In a foreclosure the lender can go after you for the entire difference and they have many years to do so. After the property is empty and perhapd vandalized, the difference between what the banks is owed and what will be paid for the property will be bigger so the owner can be held liable for a bigger amount and many "smart" people take all appliances, etc. making the difference bigger for the lender to go after the person.
Lawyers making a lot of money on foreclosures and there is a real estate show on the radio about short sales and foreclosures by a Tampa law firm and they always stretch to choose the short sale route and try to stay away from foreclosures.
Btw many condo's have been proven to be bad investments and are hard to get rented. Most people like single family homes better and the Condo associations often have to approve a tenant for high fees and unless the owner is willing to pay something towards the application fee, it will be hard to rent where the Condo ass. will ask for $ 100.- to $ 125.- per person for an application.
As someone who has been through this, definitely do the short sale if there is no other alternative to keeping it. When you do a short sale or deed in lue of foreclosure once the sale is done, it just shows on your credit as a lot of late payments vs. actually owing them money. It still hurts your credit and takes quite some time to get it back up. I didn't have much of a credit history but now its been about 3 years ad im back in the range of being able to get loans again at somewhat reasonable rates and hope to next year purchase another home.
while the home purchase in the first place was the biggest financial mistake I have ever made, doing the deed in lue vs letting it foreclose was the best option I had and im glad I made that choice.
A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens' full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.[1]
source: wiki
StPete Guy told you how to game the system, and that's one way to do it. The other is to just talk to the bank and give them the key without further destroying the house by sitting it empty if you can't get a renter. It will be vandalized and it would simply widen the gap between sale and what you owe and if they come after you, you are just making the judgement bigger.
In any case you are looking at a series impact on your credit and that may or may not mean much depending on your situation. Look into that very carefuly.
Other options are refinance it to a lower rate. Even investment properties qualify for some type of relief and may be rent with small money going out of pocket to cover the mortgage so that you will wait for better time.
No matter what you do, spend time and make sure that you understand the cosequence of what you are about to do. You will get completely opposite suggestion that says 1) game the system and just let it into a looong foreclosure of say 24 or more month while you pay a lawyer and make money, if you are lucky to have a renter. The lawyers will do this for you as long as you pay them the monthly fee. Nothing wrong with this approach if you are just looking at it as a business decision. But you need to have money from a renter that covers the lawyer and then some for this approach to work. 2) refinance and put a renter and perhaps pay the gap until you will be able to sale the condo. So, it is upto you to weight the risk and decide. There is a short sale/foreclosure section in Real Estate section of City Data where you can read and get different opinion/information that will enable you to decide what is best for you.
Example of questions I would ask myself if I were in your shoe will be (just looking at it as a business decision) 1) what is the impact on my credit ? Do I need credit in my immediate future? Are any of my other business tied with having good credit? If so, how much the consequence of not having a good credit is?
We lost two investment homes. Just walked away, said nothing to the banks. My credit wasn't affected. However: the "second" lender on the one home is calling every single day for the 30,000. That one might hurt ouch!
Chi Tino - If you're talking about a court house steps sale that is different that foreclosed homes on the market. They are shown just like a regular home is. I showed three this morning and all three were in good condition I was happy to say. I also have two other people chasing them and are having no luck.
It is like always: Nice homes, that are well priced, in nice areas sell quickly.
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