Selling a House with Negative Equity
Nobody likes to owe more on an asset than it’s worth. We call that “being upside down” when we’re talking about cars and trucks, but when the same thing happens with a house it’s called “negative equity.” Selling a house with negative equity is not fun, but it may become necessary.
When a house is vacant and still generating utility bills for water, gas, electricity and cable, that means it’s costing the homeowner hundreds of dollars each month. Leasing it to tenants may not be a good option, so those utility costs are simply money down the drain. They will never be recovered, and they do not represent an investment in the value of the house.
If you find yourself in a situation where a vacant house is costing you far more than you can afford, that’s when you may look at how much equity you have in the house and how much you could pocket if you sold it now. If you can come out ahead at closing, meaning your mortgage debt is less than the value of the home, the decision to sell may be simple and easy.
If your current mortgage payoff is higher than the market value of the house, the decision to sell may be much more complicated and somewhat difficult.
How Did Your Negative Equity Come About?
If you are aware that there’s a negative equity situation regarding the value of your home, you also need to consider how it came about. Was there a flood or a fire that caused damage to the house? Is there an economic downturn in the geographic area where your house is located? Or did you take out a home equity line of credit at some point and max out that credit line making purchases?
The reason you need to know the answer is because it will matter to any prospective buyer looking at your home for sale. Flood and fire damage can be repaired, and an economic downturn will eventually equalize, so the value of the house can be increased in the future. Your personal financial circumstances, however, will need to be handled if you used your home as equity and spent the money.
The bottom line is this – when you’re selling a house with negative equity you need to be prepared to bring cash to closing in order to pay off all mortgage and home equity credit lenders. Sometimes you can negotiate with those creditors, but they must be paid to transfer clear title on your property to a new buyer.
Get Help When You Have Negative Equity
If the idea of negotiating with your lenders and bankers bothers you, and you don’t want to deal with real estate agents and buyers who are borrowing money from yet another mortgage company or bank, there’s a good alternative. You can call We Pay Fast and talk to the professional real estate buyers. They will help you understand your situation and your options.
Call 405-521-1807 or email [email protected] when you are selling a house with negative equity and need some professional help. There’s no cost to you for advice or selling expenses.