Paying To Sell Your Own Home

Sounds ridiculous, doesn’t it?  Who, in their right mind, would pay to have a buyer buy their home?  For so many Americans, that is exactly what would need to happen if they sold their house today.  Why?  No equity – plain and simple.  You see, with selling a house, comes the burden of paying commissions, fees concessions and closing costs.  These amounts can be as high as 8%-9% of the final sales price of the home.  So, if your house sells for $150,000, you could be on the hook for $13,500 in selling costs.  That might be manageable if you only owe $135,000, but for many folks, it’s not.
Unfortunately, many loans were given out in the last decade that required little to no money down. While this may have allowed folks the opportunity to buy instead of renting, it is now the source of much stress and hardship.  Why?  People are losing their jobs, property values are dropping and not enough time has passed (and consequently not enough payments have been made) to have built up enough equity to cover closing costs.

“Upside down is not a good place to be when you’re already struggling to make ends meet and the mortgage becomes more difficult to pay every month.”

Worse yet, some homeowners have found themselves upside down in a negative equity position on a relatively brand new home.  How could this happen?  Well, if you borrowed $250k, for example, and at the time the house was worth $260k, you had a little equity to begin with.  Now its 3-5 years later, the market has changed and the house is only worth about $235k, but you still owe $240k on the mortgage.
Upside down is not a good place to be when you’re already struggling to make ends meet and the mortgage becomes more difficult to pay every month.  They’d like to sell, pay off the mortgage and get out from under the whole situation.  Unfortunately similar, newer houses are selling for much less than the homeowner owes.  They’d be lucky to get the $235k, which is not even enough to pay off the mortgage and cover an additional $21k in selling costs.  In this scenario, the seller would actually have to come to closing with at least $26k to make their problem go away.

What many people may not know is that there are a variety of ways to sell a home.  You’ve got to do your homework and get “bids” from several realtors and/or investors before you sell your house.  Find out who can bring the solution that best meets your needs.  At the very least, you’ll discover who you don’t want to do business with and learn a lot more about the housing market and your potential options. 

There are several solutions for the homeowner who find themselves needing to sell, but have very little equity or are upside down on their mortgage.  One strategy is selling the house with owner financing using a technique called Mortgage Assignment.  With Mortgage Assignments, we are simply selling a home which is not selling through traditional real estate means to buyers that do not qualify for traditional financing.  Using this strategy, the loan(s)/lien(s) are assigned to a buyer in exchange for the deed (ownership).  

Although virtually no loans are “assumable”, anyone can make payments on anyone else’s mortgage and as long as those payments are made, the lender will consider the loan to be performing.  In a Mortgage Assignment Sale, the buyer agrees to make payments on the seller’s mortgage going forward in exchange for ownership of the property.

Sellers like a Mortgage Assignment because it is a quick and easy way for them to sell their house when they've had a hard time selling, or that they are unable to sell because it is upside down.  This strategy works whether their house has very little equity, no equity, or even negative equity..  In many cases the home owners are able to sell their house fast for near full market value!

“No homeowner should be cornered into pursuing just one solution to their problems.  You need options.”

Home Buyers love Mortgage Assignments because they create an easy way for them to buy a home without qualifying for a loan through a bank.  There is an abundance of buyers like this right now, because, it's very difficult to buy a house today with conventional financing - Even if you have good credit and a 20% down payment.

What is the Profile of a Typical Mortgage Assignment Candidate?

• Has a difficult to sell home – due to the home having little, no, or negative equity, or simply a home that is hard to sell size, or location, or a home in a down market, etc.
• Needs to sell more quickly than is typical using conventional list and wait method
• Bought or built a new home with a $0/down (or minimal down) mortgage in an area that has not appreciated.
• Refinanced an existing home, borrowing most of the equity, in an area that has not appreciated
• Bought a home in an area that has seen significant price reductions
• Has suffered a divorce, lost job, medical problems, or other financial hardship including any combination of an increase in expenses and/or decrease in income
• Has a non-owner occupied investment property that is no longer performing to generate positive cash flow
• Has an Adjustable Rate Mortgage (ARM) in which the payments have increased to an unaffordable level
• Has had an increase in payment due to an escrow shortage adjusted after tax increases, or an under-funded escrow from the purchase of a new home

You can learn more about Mortgage Assignments and other selling options by visiting us on our website at http://www.housebuyerssellers.com.  No homeowner should be cornered into pursuing just one solution to their problems.  You need options.  Get those options by talking to several realtors and several investors – Each will bring a different set of experience, solutions and options for you to choose from.  We always recommend that you seek the counsel of an attorney and/or financial advisor before signing an agreement or going forward with a transaction involving real estate.