My question is, if they make me an offer that is less than what I owe to the mortgage company, what happens to the remainder of the money? I thought perhaps they would refinance the remainder, but at that point I’d have nothing as collateral. Does anyone know?
I am looking at trying to sell my home because my husband lost his job three months ago. With no prospects in the horizon, and only one income I am able to handle the other bills, but not able to pay the mortgage at the same time. I never thought I would find myself in this position so, I’m just looking at all options to figure out which one will cause the least damage to our credit.
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#1 by Natalie W at March 22nd, 2009
dont do it you will loose out
#2 by Mark C at March 25th, 2009
They always pay 25 to 50% less than the value, then you are stuck with the difference. That is how they make money.
#3 by Cribber at March 25th, 2009
You will have to pay off the remainder at closing. Whether you get a separate loan for that or whatever, they don’t really care. Generally when the wholesalers (We Buy Houses) look at what you have, they are going to do a deal based on what you owe. These days houses are cheap, so if you have negative equity they will pretty much say they can’t help you. It is all in the numbers. I run several rentals and I flip houses from time to time. If someone is in a bind, sometimes I’ll do a transfer of ownership to me, keeping the loan in their name. Then that person will move and I’ll rent out the house and pay the mortgage out of that or sell it if I can. The person isn’t out from under the loan, but they don’t have to make the payments and I generally can get them out of the loan in about 3-4 months.
#4 by fanace at March 27th, 2009
I would try not to get in to big of a hurry,put your home in the paper or list it with a Realtor. You want to get at least what you owe on it, or a little more.the we buy houses people usually don’t offer much
#5 by hirebookkeeper at March 30th, 2009
They usually buy homes that need repairs and they try to make a 10% profit on their investment. These deals are for people who have no cash to fix up their home to make it saleable.
#6 by righteousjohnson at March 31st, 2009
They will low ball you on the price, and you will still owe the bank any balance remaining, only now you won’t own any assets to pay it off with. These ‘we buy houses’ operations are just looking to turn a profit for themselves by taking advantage of people in desperate financial situations.
If you need to get rid of the property, contact you bank directly and tell them you want to sell your house via a ’short sale’. It’s much better than waiting, and then having to declare bankruptcy. Basically, you’re forfeiting the mortgage. If you don’t own it, you don’t owe on it either. This way, if the bank sells the house for less than you owe, you don’t have to cover the balance, and your credit history doesn’t take a hit.
Banks aren’t real happy to do this, so the wheels turn slow, but they don’t want to own an empty house either. In this market, if they can verify your inability to pay, they will usually accept your offer, just to get it off the books. After all, half a loaf is better than no loaf.
#7 by Lesh at April 3rd, 2009
I have read reports about businesses with names like we buy houses. These companies rely for their income on buying homes off desperate people for far less than they are worth (even in the present poor market conditions) then selling them again as quickly as they can at a profit. Obviously it is not in your best interest to sell to this type of company. You would get more selling through a reputable estate agent even needing to sell it quickly. Check with your lender, the mortgage broker who arranged the original loan, or a real estate agent about what happens if a house is sold for less than what is owed to the mortgage company. This commonly happens in the present market and you do not need to disclose your desperate situation to them to get this information.
#8 by acermill at April 6th, 2009
You are far better off to sell conventionally. “We Buy Houses” and similar firms generally offer you about 70% of what the property would bring on the open market. If you want to toss away 30% of the value of your property, that’s your call. I would make far more sense for you to price it 10-15% below market on your own.
#9 by Roy C at April 6th, 2009
You will still owe the remainder of your mortgage, that’s why if your property is worth what your mortgage balance is, then that is what you should be trying to get for your home or really close to it. What is your balance on the mortgage and what did We Buy Houses offer you?