Sell when you have little equity or Short Sale
Sell when you have little equity
Believe it or not, but you can still sell when you have little equity in your home. Here we’ll show you and example and will use some sample numbers that may or may not be close to your situation. Contact us if you have any questions or you don’t understand parts of the example.
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).
Lets assume that 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? After that you will need to bring cash to closing.
Another option will be for you to 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](the advantage here is that 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.
If you are wondering how to sell when you have little equity:
Another option is Short sale. Short sale is a special case when you have a purchase agreement and show that your property is worth less than you owe for it. Our firm can negotiate on your behalf with your lender to accept a smaller amount for the home than the existing loan balance. This specific procedure could be a very time consuming process.
In some cases it might last from 6 months to 2 years and there are no guaranties that the Short sale will be approved. Additional information you need to know is that, when you Short sale the house, you damage your credit and will not be able to obtain financing for the next 3 years.
For all of the above reasons and sample cases we demonstrated for your convenience, we recommend to sell a property on Contract for Deed or Subject to Existing loan balance.
For more information or specifics to your particular situation, please contact us and we’ll be more than happy to help.