A recent report released by CoreLogic indicates that 9.9% properties in Connecticut are underwater. These homes have lost their original value, and homeowners have no choice other than to let the lender foreclose on the house or leave it as-it-is.
A short sale is another option, but the lender must accept less than the owed amount on the mortgage. In that case, a short sale is the best option as you can walk away from the deal without having to pay more than the value of your house. The bank will forgive the pending debt amount. A short sale is less damaging than a foreclosure, and you are not held liable for the deficiency balance.
However, the problem does not end here.
A short sale transaction is complicated and time-consuming. You must show proof of financial hardships and reason as for why you cannot pay back your loan.
The transaction becomes more difficult when the property in question has structural damages. Exterior wall cracks, water damage, termite issues, roof destruction and dry rot issues are fundamental flaws and should not be ignored.
Can I Short Sale a Property with Extensive Structural Damage?
You can always sell your house no matter what’s the condition. However, the experience of short selling a distressed property is not always smooth. You have two options.
Spending money on an underwater property will not bring any profit. Furthermore, most sellers do not have enough funds to cover rehabbing of a property with structural damage.
You have less time when your house is headed towards foreclosure. You need a quick sale of your home without making any repairs. Selling your house as-is gives you the opportunity to let go of the property without spending countless hours and thousands of dollars in making the property “nice” again. The rehabbing costs of a house include:
You do not have to pay for these expenses when you sell your house as-is.
Ask your lender to arrange the short sale of your house. The lender can appraise the property to judge its market value after calculating the cost to repair structural flaws. In this way, you can know the fair market value of your house.
Another option is to get two independent appraisal reports that can reflect the current value of the property. You will also need a detailed inspection report. Lenders will need this report before you can sell the property.
Lenders also require Broker Price Opinions (BPOs) or Short Sale appraisals to go with the basic inspection report. When this information is not enough, the bank may call independent contractors, engineers and construction professionals to inspect the property.
The process is time-consuming because you must disclose any problems before you list the property for sale.
How to Short Sale a House with Extensive Structural Damage?
Request the bank to accept a short sale. You need to show proof of financial hardship and appraisal reports that show the value of your property has declined. Most short sale cases are accompanied by foreclosure, so an economic hardship already exists, and your lender is aware of the situation.
The next point is to work with a realtor or your lender to determine the price of your house. Subtract the cost of repairs, makeover, commissions, marketing expenses and you will get the fair price of your home. Think from a buyer’s perspective and the real cost of making the house livable again.
List the house with the approval of your lender. Alternatively, you can also contact a reputable cash buyer to purchase your house as-is within ten days.
Click Here to Find a Reputable Cash Buyer in Shelton CT.