what happens when a house won't sell?

[gentlemango]

How do you unload a house that won't sell?

We have a fixer upper in a depressed area of rural NH. Houses are sitting for a couple years. We were talking again tonight about selling. Prices have slumped enough that we're underwater, but we'd be willing to go into some debt to get into a better place to live.

How DO you sell an unsellable house? Can you turn it over to the city for the assessed value or something? What if it just WON'T sell, at any price? No one wants an old expensive oil sucking fixer upper these days.

[koofie]

I would try branching out in where you advertise. If you have "greened" you house in any way, even by only using green products, you can advertise it on a green house website. If you have land, you can advertise it as land or on a website that focuses on land. You can also ask to see if anyone can just take over payments, and they would get whatever equity you have. I can't guarantee anything will work, but a lot of the above can be done for free. Also, if you have anything you can offer regarding services, you can throw it in with the deal, sewing or childcare or research or carpentry, whatever. You can also just put it on the market and let it sit - someone may come along in 2 years if you can wait!

Good Luck!

[texmati]

Originally Posted by gentlemango

How do you unload a house that won't sell?

We have a fixer upper in a depressed area of rural NH. Houses are sitting for a couple years. We were talking again tonight about selling. Prices have slumped enough that we're underwater, but we'd be willing to go into some debt to get into a better place to live.

How DO you sell an unsellable house? Can you turn it over to the city for the assessed value or something? What if it just WON'T sell, at any price? No one wants an old expensive oil sucking fixer upper these days.

All houses will sell... it might just be much lower than what you expect. Maybe try one of those 'we buy ugly houses' poeple?

I didn't realize that the real estate market in new hampshire was so down... I always thought of it as a ritzy area... like conneticut.

[SleeplessMommy]

You can give the house back to the mortgage company - deed in lieu of foreclosure. Or you can drop the price until it sells, and do a short sale. There will be a hit to your credit.

[wildmonkeys]

I agree with pp - it will sell eventually. Just maybe not for as much as you need/want. Is renting it while it is on the market a possibility? Or bringing in boarders for a bit so that you can get together some money to pay any difference between what you owe and what you can sell it for...

I used to live in WVa which is also rural and a difficult real estate market and I have heard of it taking multiple years to sell a house. Good luck.

[gentlemango]

Thank you for helping me brainstorm. Is there a law about giving the deed in lieu of foreclosure? Right now the bank is saying that they would need the deed plus about $200K to make up the difference.

[Jilian]

I'm pretty sure you can only do a short sale if it is your primary residence. You can only do a deed in lieu if the property is vacant. You have to be behind in payments and contact your mortgage company's loss mitigation dept. Most places will not even talk to you until you are 1-3 mos behind. Then you request a deed in lieu, the legally cannot offer it to you because it is too beneficial to them (vs foreclosure). You usually need to prove a hardship, like a major hardship. They'll likely ask for financial documents, bank records, proof of income, etc along with a hardship stating why you feel you are unable to pay. Then it takes a month or so and they give you their decision. If you have a second mortgage or home equity on the house it is VERY hard to be granted a deed in lieu.

We were granted a deed in lieu in May because our son was born with a surprise heart defect and needed heart surgery @ 2 weeks old and now needs lifetime cardi follow up. On top of that DS1's dad rarely pays child support and continues to take us back to court. Those two reasons together qualified us for a deed in lieu but they needed proof. We sent medical records, bank statements, and a billion other documents. We had GMAC. A friend with Wells Fargo was denied both short sale and deed in lieu because her husband's business slowing to a halt was not a good enough reason for them.

[gentlemango]

Crap. We'd be denied then. Our circumstances aren't that dire, our income is okay, we hate living here and can't afford to fix this place up or keep it heated. But it won't sell either so I guess we're stuck.

[meganmarie]

How low can you go? I've noticed that sellers around here (NJ) have been a little slow to adjust to the current slow RE climate...they are not lowering prices enough and so their houses sit there. But when there's a real bargain, it goes. Anything will sell for the right price. If you put your place on the market for the value of the underlying land, less the cost of knocking down the house, then it might be the right price for someone who wants to build new! But that doesn't seem like a great solution for you.

Could you rent it (just enough to cover the mortgage) while you move elsewhere? That is what my MIL is doing while she waits for the market in her area to stabilize.

Or, could you re-look at the idea of fixing up the place? I know you say you can't afford it - and yet you say you are willing to go into debt if it will help you make a move. Do you have the ability to take out a home equity loan? I was quoted a rate of 4.5% on one last month. I think $20K in NH would go a long way to make some good changes - upgrading the heating system, giving the kitchen a minor facelift, energy-efficient windows. And a little sweat equity too - new paint, planting flowers, repairs - can help.

We just put our house up for sale. Beforehand, we invested 2.5 really intense weeks in a mini-makeover. It was like living in an HGTV episode. We did it all at night between 9pm and 1am after kids went to bed. On our own we touched up paint, patched ceiling holes, cleared out clutter, fixed up the basement, repaired a door, re-grouted the tub, did landscaping, etc. We got contractors in for 3 high-impact jobs (roof, fencing, and paving) totaling about $5500. And at the end of it all our house was *sparkling.* We sold it in 3 weeks for the price we needed despite the crappy market.

Have you had a real estate agent in to look at the place? We had two come by. They gave us very good and specific advice about which upgrades we really needed to do.

[gentlemango]

It needs a lot of structural work, along the lines of $100K worth. I think our only hope would be to sell it as a fixer, but we're so underwater I don't know if we can take on enough debt to lower the price to what it would take to sell.

Edit: thank you for the idea of having a realtor come in and give us feedback, I had not thought of that!

[kerc]

Originally Posted by meganmarie

We just put our house up for sale. Beforehand, we invested 2.5 really intense weeks in a mini-makeover. It was like living in an HGTV episode. We did it all at night between 9pm and 1am after kids went to bed. On our own we touched up paint, patched ceiling holes, cleared out clutter, fixed up the basement, repaired a door, re-grouted the tub, did landscaping, etc. We got contractors in for 3 high-impact jobs (roof, fencing, and paving) totaling about $5500. And at the end of it all our house was *sparkling.* We sold it in 3 weeks for the price we needed despite the crappy market.

We did this too! We made a list and just started at the top and worked to the bottom. It SUCKED. But our house (starter size home) sold in 7 days.

Have you had a real estate agent in to look at the place? We had two come by. They gave us very good and specific advice about which upgrades we really needed to do.

Good idea. Also free.

Originally Posted by gentlemango

It needs a lot of structural work, along the lines of $100K worth. I think our only hope would be to sell it as a fixer, but we're so underwater I don't know if we can take on enough debt to lower the price to what it would take to sell.

Edit: thank you for the idea of having a realtor come in and give us feedback, I had not thought of that!

What would it take to make you like living there? Not love, but like? A new furnace here ran us about 5000 bucks installed -- we converted from oil to natural gas. We estimate it saved up big $$ heating last year. We should more than recoup that cost in 4 years if oil keeps going in the general trend it is going.

Insulation is also a "cheap" (er) fix. We have a 2 story foursquare. I was quoted last summer at 1800 dollars to blow insulation into the walls. My nextdoor neighbor did that and saved over 300 bucks last year.

Both insulation and a furnace would be things you'd list in the selling anyhow.

[BetsyS]

Originally Posted by gentlemango

Crap. We'd be denied then. Our circumstances aren't that dire, our income is okay, we hate living here and can't afford to fix this place up or keep it heated. But it won't sell either so I guess we're stuck.

This is us, too. Our house is in a cookie cutter neighborhood. We're a 3 bedroom. There is a 4 bedroom down the street for sale, listed at $25,000 less than what we paid for ours 3 years ago. It isn't selling at that price, either.

I'm scared to find out what that house really does sell for (it's a short sell). That'll tell us what our house is likely to get.

And, we don't really have a place to get the money for the in between part between what the house is going to sell for and what we owe. We anticipate owing about $40,000 or so. We have credit cards, but that's such a nasty place to be that we'd love to avoid credit card debt. We feel like we're in a real pickle.

[mightymoo]

Even if the house needs structural work, I agree you need to make it look as nice as possible. Cheap updates, especially ones that highlight hte main features of the house and reduce any major downsides. Then you have to price it right. Go to all the open houses for houses in your area and your price range. Look critically at your house and these houses? Are these houses nicer? If they are, then you are overpriced. In order for your house to sell, a buyer needs to think your house is better than all the houses of similar price. If your house has serious issues you can't remedy easily or cheaply, then you have to lower the price until you are competing against much smaller homes so that size becomes a big advantage.

If you are only trying to sell it becuase you want to move, I would take it off the market now, go from room to room and look it over with a critical eye and make a big list of things that need to be done. Then aim to get as many done as possible to put in on the market next March. The spring market is the best time of year to sell, you won't have the stigma of having been on the market a long time or the hassle of having to keep it perfect for months and months.

We sold our house in 1 month, but we used a realtor, put it on the market in March, we gutted and remodeled two bathrooms (very economically for a total of $5K for both - they were extremely dated and in the end looked like new), painted, ripped up carpet, etc. We didn't want to spend a lot of money, but knew the outdated (yellow tile in one, blue tub & tile in another) bathrooms would mean buyers would discount our house $15-20K or overlook it altogether. We did the remodels in 3 weeks (a craaaaazy 3 weeks) We priced it right, looked very carefully at the competition and if we hadn't gotten an offer when we did, we would have dropped the price further. We had to sell quickly because we bought another house and didn't want to carry two mortgages, in the end it worked out perfectly, we had the two houses for only 3 weeks. I do feel I had an advantage in that my parents are real estate agents and I work as their assistant, so I know this market in my area extremely well.


I think the problem here (and with a lot of houseson the market now a days) is that I suspect the price that would sell your house is well below what you are willing (or able) to take for it. You might seriously reconsider whether now is the best time to sell. Even if the house is not what you want, you might be better off waiting for things to even out and take the time to fix the house up than to walk away with a serious debt hanging over you or a foreclosure or short sale on your credit, etc.

[gentlemango]

That's precisely the problem. How much debt is reasonable to take on? $75K? $100K? How much money is too much to lose? How much debt is too much?

[SleeplessMommy]

Some ideas - having a real estate agent look at the house is free. Try 3 or more. Some are more helpful/forthcoming than others about what to fix up.

The cost of the structural fixes may be lower now with many underemployed contractors. You need the structural fixes done, but not by the most expensive contractor out there. Is this an older farmhouse with stone foundation? Some people have done minor house jacking and sistering of beams as a DIY... but you have to be really careful. If you ask around maybe you can find someone locally who has done it before.

Was the damage disclosed when you bought it? Do you suspect fraud in the inspection or appraisal of the house? If its a newer house (< 10 years old, you sue the builder)

You can do a web search on your mortgage company, NH, and deed in lieu. Find out if they have let other people off the hook. Also call around to local companies that are helping people with mortgage problems. Your local craigslist may be a source of info.

You can "soften up" your mortgage company by not making payments. The worst they can do is foreclose on the property. In a foreclosure sale they loose about 40% of the homescurrent value. So a short sale benefits them greatly. If you are really $200K underwater, this is the way to go.

Alternately, take in borders and wait for better real estate conditions.

[gentlemango]

Wow, great advice. Going to chew this over. Thanks.

[BabyA'sMom]

BIG FYI:


Please oh please do yourself a favor and DO NOT do a short sale. The difference between the amount you owe and the amount your mortgage company accepts is counted as income by the IRS. You pay taxes on money you never even received!

Maybe doing a short sale gets you out from under a mortgage, but it puts you in debt with the IRS! Frankly, I don't know which is worse.

I do feel your pain. I married a man right when the housing market crashed. He had the house up for sale, but not one person even looked. Now similar houses nearby are being offered at 50% of asking price two years ago. And they're still not selling.

Hang in there!

[deditus]

Originally Posted by BabyA'sMom

BIG FYI:


Please oh please do yourself a favor and DO NOT do a short sale. The difference between the amount you owe and the amount your mortgage company accepts is counted as income by the IRS. You pay taxes on money you never even received!

Maybe doing a short sale gets you out from under a mortgage, but it puts you in debt with the IRS! Frankly, I don't know which is worse.

I do feel your pain. I married a man right when the housing market crashed. He had the house up for sale, but not one person even looked. Now similar houses nearby are being offered at 50% of asking price two years ago. And they're still not selling.

Hang in there!

Unless you qualify for the Mortgage Forgiveness Debt Relief Act.

http://www.irs.gov/individuals/artic...179414,00.html

[CrunchyGranolaMom]

Originally Posted by meganmarie

We just put our house up for sale. Beforehand, we invested 2.5 really intense weeks in a mini-makeover. It was like living in an HGTV episode. We did it all at night between 9pm and 1am after kids went to bed. On our own we touched up paint, patched ceiling holes, cleared out clutter, fixed up the basement, repaired a door, re-grouted the tub, did landscaping, etc.

Megan, you are my hero! Seriously, I read this post two days ago and just keep thinking of you and your dh working every night to get your house in shape!

Our house is on the market now (sigh...no bites yet) and I knew it was coming and slowly worked throughout the year to get it read. I can't imagine doing all that work and having kids around. I can barely check my email after my kids are asleep!

gentlemango: good luck figuring it all out. We're also faced with the "all houses will sell. They just may sell for a lot less than you'd like them to" situation

[Treasuremapper]

You might want to hang on to see what happens with the elections going on and everything. In the meantime, have you considered buying a St. Jude statue and burying it upside down? It worked for me.