Sell Your House FastI saw this question come up on trulia.com “I’m getting transferred in my Job. Scared that I’m not going to be able to sell my house because of upside down. What to do?”

It got me thinking about how many people are feeling this way.  How can I help them feel better about their situation?  I want to assure them that it’s going to be OK, and there are options to sell your house fast.

While some of the forum post answers are helpful, none of them gave me a warm and fuzzy about getting over the person’s mentioned fear. I can only imagine how even more confusing it made them.

Below is a recap of some of their recommendations and what I recommend as the best solution for getting out of this house fast, saving the credit rating, and minimizing more loss of money.

Understand the Seller’s needs

First, I needed to understand the goals of the person asking this question.  What is it that they want to accomplish?  It sounds to me like they are moving to a new town, that’s a definite.  They have a house left behind and they want to avoid two mortgages or even an apartment payment and this mortgage.

The caveat in the whole thing is that they owe more money than the house is worth. I imagine that they don’t’ want to pay the difference of what they could sell the house for at market value to the mortgage company.  So what are their options?

Possible solutions

As advised by one poster, they could work with an agent to rent it out and move to the new town in hopes that the rent covers the mortgage. This would be a good option if they had a high tolerance for risk, which I don’t think they do.  The risk is that managing a property from a long distance is a potential nightmare. What if the tenants don’t pay the rent as agreed? More stress is added while concentrating on a new job.

They could go ahead and sell it with a realtor as a short sale. Meaning they would sell it for less than they owed providing they could get permission to do that from the Lender.  Typically, lenders don’t just approve that option, especially if you’re current on your mortgage.  Another reason to avoid this is that the proceedings can take upward to 6 months to complete the transaction.  So this relocating family doesn’t appear to have that amount of time to work with this option.

Going this route severely affects your credit rating.  And if they want to buy a house in the new town it would be nearly impossible unless they had a significant amount of cash to put down.  If they did have the cash; they would just bring that difference to closing as stated above.

The better option

A more pragmatic option would be to work with an investor.

Work with an investor, to buy it, and keep the existing loan in place for a short term is a Win-Win for the both of them.  Here’s why.

Benefits to the sellers

1. The sellers get to sell the house fast

2. They get the benefit of not dinging their credit when purchasing their new home.

3. By wrapping the existing mortgage in the sale of the house they are protected by a servicing company that the mortgage will be paid timely, and can show that in their applications for a new purchase that accounts for debt to income ratios.

4. Structuring the sale this way will net them more money than they would by doing a short sale.

Benefits to the investor

1. He/She would get a property that works within their profit margin plan.

2. The investor would not have to take out another bank loan or borrow from a hard money lender.

3. This strategy forces less cash out of pocket of the investor to put into the repairs needed.

As you can see, this is a real Win-Win for both parties.  The only real question that usually comes up is, as I mentioned above, loan servicing.  This assures the seller of the property that the buyer will make payments on the original loan as written in the closing documents.  If they don’t; the seller gets the property back and whatever payments were made remain.

I don’t know too many investors that will go through closing title processes, make improvements to a house, and not pay the mortgage put in place.  So it’s safe to assume that this is the best of all of the options presented to the person relocating for a new job.  They simply can say to an investor that “I need to sell my house fast.” And utilize this strategy as an alternative to the traditional use of a realtor, FSBO, or any other method to sell your house.

If you have a house that you would like to sell please reach out to me for a fair offer by completing this short form.

If you are an investor looking to add to your portfolio for rehabbing or rentals get on my buyer’s list for early notification of below market properties.