How to Sell House when Upside Down (Lansing: for sale, real estate)

RJ17015 · 10-17-2008, 08:57 AM

Our house is on the market in MI -- we've gotten 2 offers, both so low that we have to borrow $ to sell house. When we moved back to MI the market was booming so we bought when the market was at the highest -- now that same house has depreciated over $200K.

How are others in MI doing this? We currently have an offer that we'd like to work out, but would have to find $50K to close on the house, money we don't have now. I KNOW we can't be the only one in this boat -- so what are others doing?

FYI -- my DH was unemployed for 10 months -- the ONLY job offer was out of state -- so we HAD to move.

Coldjensens · 10-17-2008, 09:27 AM

See if you can make a deal with the lender to take the sale price and release you from the morgage. It may help if you cna point out that you have paid more in interest than the amount of the difference.

I had a friend who did that but he had paid more than the entire amount of the loan in principal and interst payments. The bank accepted the sale price and discharged about $50,000. Then he got a bill fromt he government for taxes on $50,0000 in extra income.

I think that they waived those taxes temproarily. Check into that. You may need to hurry up and make the deal withthe bank if you want to avoid those taxes.

maja · 10-17-2008, 09:52 AM

I really don't have an answer for you but just wanted to wish you good luck. These are such tough times. I feel for you and many others who are in similar situations.

Luke9686 · 10-17-2008, 11:03 AM

See if the lender will allow a short sale. That's about the only option.

ImaMichigander · 10-17-2008, 11:18 AM

We moved in July and our house in MI is still for sale. We too had a job offer out of state. Right now we are looking at haveing to come up with about $67,000 if someone offered us asking. No one has. And the neighbors just lowered their house to $40,000 less than we are asking. We have talked to our mortgage person here in Ohio and she was able to see that our new house appraised for more than we paid. Therefore, we have equity in the new house, despite the fact that we just moved. They are checking into letting us borrow that amount that is the equity.

Don't know if it helps, but maybe a direction to move in....

I feel your pain.... And then the pain of my realtor being a complete nitwit, but another story for another day!

RJ17015 · 10-17-2008, 11:25 AM

Quote:

Originally Posted by Coldjensens

See if you can make a deal with the lender to take the sale price and release you from the morgage. It may help if you cna point out that you have paid more in interest than the amount of the difference.

I had a friend who did that but he had paid more than the entire amount of the loan in principal and interst payments. The bank accepted the sale price and discharged about $50,000. Then he got a bill fromt he government for taxes on $50,0000 in extra income.

I think that they waived those taxes temproarily. Check into that. You may need to hurry up and make the deal withthe bank if you want to avoid those taxes.

The catch is the mortgage is covered -- we took out a separate home equity loan to finish the basement, put a patio on back, replace damaged cement, home repairs, landscape -- you get the idea -- so the mortgage company is NOT willing to work with us, since they'll get their money, it's the Home Equity Loan that cannot be covered. The lending company for the Line of Equity is willing to give us a personal loan of $25K -- but we're still short $25K -- we have to respond to this offer today. Has been on the market almost 4 months now, so HATE to lose this offer, but just don't know how to do it.

We have yet to buy a house here since we've lost all our equity in our home, and have nothing to put down -- so for now we're renting a home til our house there sells - so can't borrow against a current home.

RJ17015 · 10-17-2008, 11:34 AM

Quote:

Originally Posted by maja

I really don't have an answer for you but just wanted to wish you good luck. These are such tough times. I feel for you and many others who are in similar situations.

Thank you for your kind words, I also feel for all those affected by these difficult times. I am VERY thankful that my husband got a job, and we may be able to recoup one day.

dragon_fly_12 · 10-17-2008, 01:16 PM

Nope, you're not the only one.

Live and work in Ohio (escaped from MI June 07), pay a mortgage and taxes on a parcel about 20 miles outside of Lansing. Would cost us easily $25K (that we don't have) at closing - assuming we could find a buyer. We just keep paying that mortgage instead....

No plans to come back to MI, either.

nessatar · 10-17-2008, 01:51 PM

Sorry to hear about your situation. That is happening everywhere. We didn't even try to sell our house when we moved this fall. We just rented it. It will be a few years before we can sell it without owing money...

I was going to suggest a short sale, but it sounds like that wouldn't work for you considering the home equity loan. Good luck to you. Hope you find a solution!

RJ17015 · 10-17-2008, 04:08 PM

Sad thing -- our real estate agent is advising us to go into foreclosure -- the agent who brought the bid to us is suggesting a short sale -- either way it will affect our credit. We have yet to buy a house here, and I fear IF (God forbid) my husband loses his job again, we'll have to relocate again -- can we afford to do so with poor credit. To this point have had excellent credit, and we really don't want to lose that at this point in our lives -- we're both 50+.