3 Emergency Tactics to Get Rid of Your Home
Sometimes life throws you curveballs that put a chink in your plan-a job transfer, divorce, major illness or other unexpected urgency that needs attending. In a softer housing market, it may be more difficult to sell your home in a hurry, but there are still ways to make it happen. Bankrate offers these three suggestions in case you need to sell on the fly.
A short sale or deed-in-lieu is the first option. A short sale allows the homeowner to sell for less than the amount owed on the mortgage. This may make your property appealing to homebuyers, but the downside is that your lender must approve it and transactions like these typically aren't fast. A short sale could even take up to a year or longer, says Tony Marriott, a broker associate from Phoenix.
The condition of the home is a huge factor in these negotiations, but price may be the more delicate topic at hand. "If you get too aggressive with price, you'll get a contract, but you'll get pushback from the seller's lender," says Marriott.
If you are still struggling to sell, but don't want to put your house on the market, you can try to negotiate a deed-in-lieu with your lender. With a deed-in-lieu, you sign over your ownership of the house to the lender to avoid foreclosure, but again, the possibility of this depends on the details of your situation and the lender's permission to do so.
Both of these will hurt your credit score, and the lender may still be able to force you to repay some of the unpaid loan, even after the sale or loss of the house.
According to Bankrate, a strategic default occurs when a homeowner abruptly decides to stop payments because the home's value has fallen dramatically below the loan balance. However, if time is a factor, a strategic default probably isn't the answer. This option could also take a year or longer, depending on state laws and how quickly the lender is able to sell the repossessed home.
With all the inevitable delays surrounding an option such as this, homeowners can sometimes stay in the home for up to two years before being evicted, giving them plenty of time to save money for the future.
The option is not without consequences though-tax consequences, ruined credit and difficulty getting a new mortgage loan are all inevitable.
You can also simply give the house away. The easiest and fastest way to unload your property is to give it away as a gift. "If you have a house that may have been worth $2 million a couple of years ago and can be legitimately appraised at $1 million today...get rid of it," says Martin M. Shenkman, an estate and tax planning attorney from New Jersey.
The most common scenario is to give it to another family member. An attorney is still recommended, as is an appraisal, but gifting your house is a much quicker alternative than a short sale. This way, the entire extended family can still enjoy the property and it gets you out of your emergency bind.
Though the housing market is a little slower, there are still many ways you can sell or take care of your home in an emergency situation. By using one of these three options, you can hopefully unload your property in the most efficient way possible and move on with your life.