Sell when you have little equity or Short Sale
Say, your house is worth $200,000 and you owe $195,000. Seller’s closing costs are usually 2% of the sale price (title fees, transfer tax, state deed tax, etc). Assuming you are not paying real estate commission, you will walk away from closing with $200,000-2%-$195,000=$1000. What if you owe more than $195,000? The you will need to bring cash to closing. Or you can sell a property on Contract for Deed [This term is highlighted here, does it have some special reference? Yes, when something is underlined it should be connected to Sell on Contract for Deed and Sell Subject to Existing financing](there is no transfer deed tax when you do that) or sell it Subject To existing[Same as above.] financing and walk away with some cash.
Another option is Short sale. With Short sale when you have a purchase agreement and show that your property is worth less than you owe for it, we can negotiate with your lender to accept a smaller amount for the home than the existing loan balance. It’s a very time consuming process that might last from 6 months to 2 years and there are no guaranties that the Short sale will be approved. In addition, when you Short sale the house, you damage your credit and will be able to obtain financing only after 3 years. Thus we recommend to sell a property on Contract for Deed or Subject to Existing loan balance.