Are you looking to downsize or get out from under crushing mortgage payments? It may be difficult selling your home, especially if you are dealing with a negative equity situation. Still, here are some tips for how to sell your home even when you are feeling desperate to get out of your current situation.
Determine the Market Value
You will need to find out what your home is worth. That means that you will need to get a good idea of the market value based on what similar homes near you have sold for.
The easiest way to estimate the value is to look up the property address at Zillow. This free service provides you with a fair market value estimate that can be surprisingly accurate for many properties. It maps recent sales in your area and even shows you the historical price changes for your home.
You may also get an estimate from a real estate agent. An agent brings local knowledge of what similar style homes have been selling for in your area.
List your Property
You can try selling your home without hiring a real estate agent, although it is not recommended unless you already have a buyer in mind. You will generally benefit from listing your home on the MLS. Real estate agents typically do this automatically, which opens up the buying opportunities to a much wider market.
If you are having financial difficulties, you may want to consider keeping your troubles to yourself. There is substantial anecdotal evidence of buyers holding off on making bids on distressed properties because they believe they will get a lower price once the home is foreclosed on by the lender.
If you are in danger of losing the home, then the lender may allow you extra time for a pre-foreclosure sale. Sometimes it is cheaper for them to allow you to sell the property than to have to go through all the steps of foreclosure and then have to pay to maintain the property until it sells. If the home sells for more than you owe, then you can keep the proceeds.
Negative Equity
When you owe more than your home is worth, then your options become more limited. This does not mean that you cannot sell the home. What it does mean is that you may have to get special approval from your lender to sell the home for less than you currently owe.
A short sale is a process where your lender allows you to sell the home for less than the principal balance on your mortgage. The lender may convert the deficient balance into an unsecured loan that you still have to pay off over time. In some cases, the lender may even forgive the deficient balance and simply write off the loss.
Your home is supposed to be your most important asset. Sometimes it becomes a liability and your options may change accordingly. If that occurs, these tips could help you sell your home without taking a huge loss or losing your home to foreclosure.