How do I sell my house if I still have unpaid contributions?
[ad_1]
Dubai: Being forced to sell your house while you are âunderwaterâ on your mortgage is a tough situation. Being “underwater” is when you owe more on your mortgage than the value of your home.
Often, homeowners have no choice. Your employer may transfer you to a new job across the country, or your house may be too small for a growing family.
If you’re in this situation, there’s a good chance you’ll have to write your lender a check after you’ve sold your home. But you might be able to reduce the amount you owe by setting the right asking price.
Why is it difficult to sell a house that is still mortgaged or for which you are still paying down payments?
Why is selling a home with negative equity such a financial blow? Instead of making money on the sale of your home, you will lose it.
Suppose you owe 200,000 Dh on your mortgage, but your house is only worth 180,000 Dh. You will find it difficult to sell your house for more than 180,000 Dh.
Even if you sell at this number, you will still owe Dh20,000 to your lender after your sale is closed. This means that you will have to write your lender a check for Dh20,000 on closing. This is not the outcome that a home seller wants.
So here are a few factors you should weigh before you sell your home when you are underwater on your mortgage.
1. Wait as long as possible to sell your mortgaged property
What if you are underwater on your mortgage? A popular piece of advice that real estate and loan advisors often give their clients is to look for possible ways to delay the sale of your home.
This way, you can hope that your home is growing in value, enough that you no longer have negative equity.
You can also wait until you’ve made enough monthly mortgage payments so that you don’t owe more on your home loan than it’s worth.
If you can send extra money to your lender to go directly to reducing your loan principal balance, you may be able to build equity faster.
However, the number of people around the world who are âunderwaterâ on their mortgages is becoming less and less common.
Multiple surveys show that the number of homeowners who are underwater on their mortgages is down from what it was a few years ago.
2. Set the fair asking price for a mortgaged house
If you have no choice but to sell, the key is to set the right asking price for your property. If you are underwater, you may want to set an asking price higher than what the market says your home is worth. However, subject matter experts warn against this.
Buyers know what a home is worth today. If you set your asking price too high, most will miss out on your home, looking at other properties instead.
You can’t force buyers to pay more for your home because you’re underwater because buyers don’t take into consideration what you originally paid for your home, contrary to popular myth.
You need to set a asking price that is fair, but also the highest possible amount that you can sell it for. The best way to find that price is to work with a real estate agent who knows your neighborhood well.
Real estate agents who are familiar with your area can help you set an asking price that attracts the greatest number of potential buyers, thus increasing your chances of selling your home at the highest price.
What if you don’t hire a real estate agent?
If you have decided not to hire an agent, you will first need to do your research, on recently sold properties in your area and properties currently on the market, to determine an attractive sale price.
Keep in mind that most house prices factor in an agent’s commission, so you may need to lower your price accordingly.
You will be responsible for your own marketing, so make sure you have your niche on the multiple ad services in your geographic area to reach the greatest number of buyers.
Since you don’t have an agent, you are the one who show the house and negotiate the sale with the buyer’s agent, which can take a long time for some people.
Since you are forgoing an agent, consider hiring a real estate lawyer to help you with the details of the transaction and the process of drafting a contract.
Even with an attorney’s fees, selling a home yourself can save you thousands of dollars. If the buyer has an agent, however, he will expect to be compensated.
This cost is usually covered by the seller, so you’ll still need to pay 1-3% of the home’s selling price to the buyer’s agent.
3. Furnish your home and make all necessary repairs
If you’re underwater and planning to sell, you’ll want to spend as little money as possible to sell your home.
But investing in a home staging service provider or furniture rental company (those who provide furniture and decor for rent) can pay off.
With the cost of these staging services starting at 10,000 Dh, the house you are about to put on the market can be filled with beautiful furniture, thoughtful accessories and artwork from good taste.
A staging will reorganize your furniture and decoration so that your home is more spacious, bright and airy. It will help your home make a good impression on buyers, repeat the experts.
In order to sell your home, you will need to fix broken appliances, torn carpets, chipped walls, or stuck windows.
The reasoning behind this, the real estate consultants explain, is that you can’t list your home with flaws if you expect buyers to pay more money for it.
They also add to spending a bit of money on the exterior of your home, because if they see a well-maintained and welcoming exterior, they’ll be more inclined to visit your home’s interior. For example, if your house has a lawn, make sure the lawn is well trimmed.
The key here is to get the highest possible offer out of buyers. To do this, your home must be in perfect condition, both inside and out.
4. Look for ways to sweeten the deal or offer incentives.
Another way to make the home and business more attractive is to offer something to sweeten the pot. You could, for example, offer to pay some or all of the closing costs.
Buyers are looking for a deal, especially in a declining market, so do your best to make them feel like they’re getting one.
Another tip is to offer a portable residential warranty, which offers discount repair and replacement services for household appliances and systems.
A potential buyer may feel more comfortable knowing the home is protected, which could make your home more attractive than a competitor’s home.
Key points to remember?
Selling a home can be stressful, especially if you have a tight deadline. Fortunately, whether you need to sell quickly because of a new job, life event, or financial reasons, there are ways to speed up the process. If you don’t have a big budget to prepare your home for sale, focus on making the right buyer impression.
Whether you’re working with an agent or going it alone, setting the right asking price is essential. Remember the benchmarking analysis you or your agent did when you bought your home to determine a fair offer price? Buyers will also do this for your home. As a seller you should therefore be one step ahead of them.
The house can stay on the market much longer than expected, especially in a declining market. If you can’t find a buyer on time, you risk trying to pay off two mortgages, having to rent your home until you can find a buyer, or in tough situations, foreclosure.
[ad_2]