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02-08-2012, 06:22 AM #1
Renter
- Join Date
- Feb 2012
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Question on short sale
A newbie here.
We own a house in N/W Michigan. We haven't lived in it since Feb. 2008. It was on the market from Jan. 2008 through Jul. 2011. Then we had a new set of renters move in. We struck a deal with them to take the house off the market for one year. They need to repair their credit, and they say they will make an offer at the end of the rental contract (Jul. 2012). It may or may not happen.
Also, we have been faithfully making PITI paymets on the house each month, every month on time.
We owe $103,000 on the house. We bought it in 2003 for $138,500. My best guess is that it's worth somewhere between $80 - $100,000 right now. N/W Michigan has been hit hard by the recession.
I understand the concept of a short sale. But, I don't understand all the mechanics.
If we reached a $100,000 selling price with buyers, we could probably cash flow the shortage.
If we reached a selling price of anything less than about $95,000, we would have problems.
How does the mechanics of a short sale work, ESPECIALLY if we have been making all of our payments on time.
We want to pay our debts, but we can't come up with that kind of money in one shot.
Can we likely come up with an agreement to pay the debt with the bank over time?
Would they automatically sue us for the balance, and impact our credit rating?
Would they forgive the balance.
Michigan is a recourse state.
What is my best option here?
Thanks for any help
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02-08-2012, 03:01 PM #2
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- Sep 2007
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- Outer Banks
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The bank will most likely let you pay the balance off over time and they will most likely record the shortage on your credit report. Some agents say you can get another loan 2 years after doing a short sale but from what I have researched, unless you have a true hardship, like loss of job, your credit might be impacted for 7 years.
Maybe you could get a personal loan for the shortage?Your Outer Banks real estate agent. Learn how to buy Outer Banks foreclosures.
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