What to do When Your Home Won’t Sell
The tough economic climate and slow housing market has left many homeowners unable to sell their homes, and for some, the options seem bleak. Some need to sell to be rid of a mortgage payment that’s grown beyond their budget; others may need to relocate to find better employment opportunities; and still others may wish to find a home that better fits their current needs. There are lots of reasons for selling a home, and when the market makes selling difficult, owners sometimes get frustrated and just walk away—and for some that may be the only option.
However, if the reason for selling is simply because the mortgage payment is unmanageable, a loan modification may be possible. Homeowners should visit the government website, Making Home Affordable, which provides information regarding obtaining a modification. But that option isn’t a guaranteed cure; it too has its pitfalls. For a look at the negative side of modification, see this BLOG POST.
Real estate agents know that one of the keys to a successful sale is proper pricing, but if the appropriate price is below the mortgage balance, the options are limited. If that’s the case it may be best to attempt a “short-sale,” a sale approved by the lender for a price below the amount owed, or a deed-in-lieu of foreclosure, where the lender agrees to accept the property for the balance owed.
With home prices in many areas predicted to fall through 2011, homeowners who need to sell should act now rather than waiting to see if the market recovers; in most instances, the wait will be far too long. In a video entitled, Your Graceful Exit, the Treasury Department encourages struggling homeowners to consider their options and to take the appropriate action.
For those who have determined that modification isn’t possible, the government’s website explains: Many homeowners may feel that they can no longer afford their home, but want to avoid the negative effects of foreclosure. The Home Affordable Foreclosure Alternatives (HAFA) Program offers homeowners, their mortgage servicers, and investors an incentive for completing a short sale or deed-in-lieu of foreclosure. With these options, under HAFA, a homeowner leaves their home to transition to more affordable housing and alleviate the mortgage debt they owe.
These options are available for homeowners who: 1. do not qualify for a trial mortgage modification under the Making Home Affordable Program; 2. do not successfully complete the trial period for their modification; 3. miss at least two consecutive payments during their modification period; or 4. request a short sale or deed-in-lieu of foreclosure.