Listed for over 85 days with no offers. Deed in lieu of foreclosure? Any advice?
I am the seller. I have a second home in Calif which has been listed with an experienced short sale Realtor for over 85 days and no offers. The last sale for a like condo was $292K, mine is listed at $272K. It has one refi, NO cash out loan on it with Chase for $318K. Freddie Mac is the owner of the loan.
I do not have a primary residence or other properties. I am not interested in purchasing another home, so I'm not concerned about not being able to purchase for 7-10 years. My credit has always been excellent, but income has dropped by 50%, so I can't keep up with payments, taxes, hoa, etc. The condo would only rent for half of what the monthly is, so that is not an option. What if no one makes an offer on this condo? I don't think that I will qualify for a short sale, as I have no tax returns to offer. I have w-2's but will not submit joint tax returns as I was not married when property was purchased, and he is not on loan, title etc. There are no joint assets. Is it best in just to let them foreclose?
I do not have a primary residence or other properties. I am not interested in purchasing another home, so I'm not concerned about not being able to purchase for 7-10 years. My credit has always been excellent, but income has dropped by 50%, so I can't keep up with payments, taxes, hoa, etc. The condo would only rent for half of what the monthly is, so that is not an option. What if no one makes an offer on this condo? I don't think that I will qualify for a short sale, as I have no tax returns to offer. I have w-2's but will not submit joint tax returns as I was not married when property was purchased, and he is not on loan, title etc. There are no joint assets. Is it best in just to let them foreclose?
Replies to This Discussion
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Permalink Reply by Wendy Rulnick on
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Tina - You probably don't want a "walka-away" foreclosure, where your property is repossessed. Ask an attorney for advice on that. Not knowing your local market, 85 days does not seem to be too long for your property to be for sale. If you have not filed tax returns, there is alternate documentation that might be accepted by Chase for a short sale. Ask your Realtor to join our site, it's free.
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Permalink Reply by Malcolm McLean on
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@Tina Smith.
You mention you "have a second home in Calif which has been listed..... '
In your 2nd paragraph, state you 'do not have a primary residence or other properties" - which is it?
You do not mention if you are delinquent on your loan?
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Permalink Reply by Tina Smith on
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Hi Malcolm,
I owned two homes for a while. I had a primary home, and a second home being the condo. I sold my primary residence a five years ago, and moved in with my husband into his home, and I am not on title. Thus the only property I own is the one that was technically purchased as a second home. I am just over 30 days late on the mortgage.
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is it rented out?
if so, what is your rental income vs. your PITI?
Tina Smith said:Hi Malcolm,
I owned two homes for a while. I had a primary home, and a second home being the condo. I sold my primary residence a five years ago, and moved in with my husband into his home, and I am not on title. Thus the only property I own is the one that was technically purchased as a second home. I am just over 30 days late on the mortgage.
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Keep track of the days and showings. Maybe you need to lower your price in order to get offers. If that doesn't work callChase regarding a Deed In Lieu.
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The property piti is $2,300. each month. It is not currently rented out. Based on other comp rental properties, it would rent for is $1,000- $1,300 a month. The rental market in the area is saturated, with a lot to choose from, very competitive.
Malcolm McLean said:is it rented out?
if so, what is your rental income vs. your PITI?
Tina Smith said:Hi Malcolm,
I owned two homes for a while. I had a primary home, and a second home being the condo. I sold my primary residence a five years ago, and moved in with my husband into his home, and I am not on title. Thus the only property I own is the one that was technically purchased as a second home. I am just over 30 days late on the mortgage.
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Permalink Reply by Kimberley Kelly on
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If you are a true hardship, then Chase may very well do a Short Sale. I'm an agent in CA, and have found that the biggest road block with Chase is the documentation of a hardship. If you have W-2's and bank statements, why wouldn't a Short Sale work? Reduce the price! Get an offer, and get moving!
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Thank you Kimberly. Another unit in the complex of like size and layout, but nicely upgraded, is listed for $299K. Mine is at $272K. I thought that buyers know they can offer whatever they want, and that hasn't worked, so I will ask the Realtor to lower the price.
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Permalink Reply by Jeff Payne on
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Listing price means nothing. It appears that yours is overpriced for the market, lower the price in a systematic way until you get an offer
Tina Smith said:Thank you Kimberly. Another unit in the complex of like size and layout, but nicely upgraded, is listed for $299K. Mine is at $272K. I thought that buyers know they can offer whatever they want, and that hasn't worked, so I will ask the Realtor to lower the price.
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Sorry for delay - busy day!
@Tina - - Both Kimberly and Jeff are right on the money.
You must provide the lender with a reason for them to short the sale - that is - waive your loan by hundreds of thousands of dollars.
The decline in value of the property is not in itself a reason - especially if you have income to cover the the loan, sold your primary at top of market 5 years ago, have savings, and live in your husbands home with little or no expense.
If you have listed the property with an experienced short sale agent - then they would have already explained this process and qualification to you.
They should have their office put together a 'short sale' submission file ready for the lenders review including all your financial information - and will submit when they get an offer and property is in escrow.
The reason short sales take so long and are denied is the IN experience of the agent and the weakness of the total submission package.
It is the bank that decides if they will accept the offer - based on all of the above.
:)
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@ Tina - in rereading your post - have you tried a modification thru the FHA Guidelines - as it is a Freddie insured loan - then you may get a mod within the step up program - starting at 2% for the first 5 years - and lowering your payments to about 31% of income escrow'd.
Income properties are harder to get mod's on - but not impossible if you submit correctly. Again it's all about the submission.
$318,000 @ 2% is $1175 a month PI for 30 years and escrow should come to $1550.00/mo.
They will often extend the term to 480 months - again to lower the PITI payments to 31% of income.
All the best!
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Permalink Reply by Janet Nation on
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Eighty five days is not long time but of course the further you go along, the less desirable your condo will become to buyers. I'm curious and what to ask about the activity, has your home had a lot of showings? Price is not the only factor why you may not have an offer, it could also be how the home is marketed including the quality of the pictures taken (if any), access to the home, how it's staged, compensation offered to the selling agent etc. Respectfully I don't believe you have an experience agent otherwise you wouldn't be writing to this forum looking for advice. Anyway I wouldn't give up so easily and do a deed in lieu, I know you don't care about purchasing another home but it's going to be an expensive way for you to live in the next 7-10 years. With any form of credit that you seek i will either be denied or your'll be stuck wth undesirable rates. It could even impact employment (don't know your age). For immediate result I would just reduce the cost further and speak to your agent about marketing, what is he or she doing to spread the word that your home is out there for sale. Keep dropping the price until you have a buyer.
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