My seller cannot sell his home....he owes more than it is worth.

By
Real Estate Agent with Keller Williams Properties, Weston FL

Selling Real Estate in Pembroke Pines Florida is confusing enough these days and to make matters worse is getting a client who is attempting to sell the property that is worth less than they paid for it...but which direction should they take? 

It all started 8 months ago. I have a tough listing that I picked up long ago. The seller knew me from my marketing. Normally I would not take this property but he only wanted me to list their ""property for sale." I explained to him the price ranges and gave him the best comparables I could find. Unfortunately "the market seems to have gotten worse before it is going to get better" and the problem is they owe more than it is worth. I explained this to them and they had said they were willing to price it above the search threshold I recommended.

They currently owe just about what the house could sell at...but they would still have to come up with about 35-40k to pay all closing costs and commissions. It is an even tougher situation as the sellers are now divorced and although they are on friendly terms...they want to move on. They also have an apartment that they are drawing equity from so they can compensate the money they do not have to pay bills. I asked them if we could get a price close to the appraised value would they listen. They would but I explained that they would have to borrow money to cover the 35-40k they would need to bring to closing.

I also suggested renting the property but they are not sure about this as the rents they can command would still not cover the expenses they pay out. I told them the heart wrenching last resort of going into foreclosure and negotiating a short sale. They are still not willing to do this unless it is a last resort. The real problem was when they purchased the home it appraised for about 30K more than it is worth now. They had a new appraisal completed and if they were to refinance they  would still be below what they need to cover. Plus their closing costs would also make it not worth doing.

I mentioned this other property they own and I told them to see if they could draw the equity and put it on the side so we can sell the problem home and he could get out. He might consider this but I am not sure if that is the best idea. This is a tough situation as I really do not want to abandon them and they are very nice people and really want me to sell it but the obstacles make it difficult for all.

I wonder what other solutions they might have.                                            

Posted by

Neal Bloom

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the lock to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Location:
Florida
Tags:
listiing
seller
selling pembroke pines
short sale
refinance florida
pembroke pines florida real estate for sale
money
appraisal
property

Comments 38 New Comment

Rainer
54,808
Joe Dallorso
Ocala Real Estate
Coral Shores Realty

Neil

We're seeing a lot of "investors" up here in Ocala who bought houses at pre construction prices thinking of selling them for a profit as soon as they were completed who are now in a similar situation. What I wonder is how any one could have recommended such as investment in 2006?

June 01, 2007 05:41 PM
Rainmaker
334,754
Ann Cummings
Portsmouth NH Homes - Service With a Smile!
RE/MAX By The Bay - NH and Maine

Regarding the deed-in-lieu I mentioned above, we did, in fact, have an attorney involved in every step of the way, and my sellers' credit was not affected at all.  They will receive a 1099 at the end of the year, and will have to pay taxes on the forgiven debt, but that was FAR better than the alternative of being foreclosed on or declaring bankruptcy, which they had been considering.

The bank assured them that their credit would not be harmed and the attorney confirmed that, and so far on their credit reports, that has been confirmed as well.

I would never take it upon myself to offer legal or financial advice and strongly urge my clients to seek legal and/or financial advice in any kind of situation such as this.

Ann

June 01, 2007 07:56 PM
Rainmaker
573,313
Neal Bloom
Realtor CRS-Weston FL Real Estate
Keller Williams Properties, Weston FL

Joe,

That was spreading all over Florida.

Ann,

The only problem is the bank has to accept it and he might not  I might be totally out of the deal in that case.

June 01, 2007 08:06 PM
Rainmaker
334,754
Ann Cummings
Portsmouth NH Homes - Service With a Smile!
RE/MAX By The Bay - NH and Maine
Hi Neal - if they do choose that route, you would be out of the deal.   For my clients, it was best for them, and that's what really counted in this case.  I was out of it, but they ended up being able to get out of a bad situation and sang my praises all over the place.  They had also, over time, given me several referrals and nice references.  It was what was best for those clients.
June 02, 2007 06:03 AM
Rainmaker
573,313
Neal Bloom
Realtor CRS-Weston FL Real Estate
Keller Williams Properties, Weston FL

Hi Ann,

I know what you mean..do I give them an out and I end up with only praise or possible referrals..we shall see..thanks.

June 02, 2007 08:39 AM
Rainmaker
573,313

Neal Bloom

Realtor CRS-Weston FL Real Estate
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the sunglasses to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information

Feedjit Live Blog Stats

Enter your email address:

Delivered by FeedBurner

Real Estate Blogs - Blog Catalog Blog Directory BlogBurst.com BlogBurst.com ButtonGenerator.com Blogarama - The Blog Directory Subscribe Weston Realtor,Weston Real Estate,Weston Florida homes, Condos,homes Weston Luxury Real Estate,Pembroke Pines Condos,Pembroke Pines Homes, Weston Florida Real Estate,Weston Home, canadians,canada , Realtor,Weston FL Real Estate, Relocating to Weston FL,Weston Florida Real Estate,Weston Life Style,Pembroke Pines Lifestlyes,Weston FL Realtor, Weston FL Real Estate Agent,Weston Florida Real Estate Agent,Realtors in Weston FL,Realtors in Pembroke Pines FL,Florida Realtors,Broward County Realtors,Broward County Real Estate agents Blogging Fusion Get great free widgets at Widgetbox!
free page hit counter