How can I quickly sell my house that I owe more than its worth?

Posted under Sell house quickly

I owe $240,000 total but house around me are selling for $180,00 - darn bubble! Can I go through one of those cash for home co.? What happens if I sell for less? What happens to the balance of the loan. I need out of this one quickly. I just got married and cannot afford this house and another in NY.

Hate to tell you this, but you aren’t going to be able to purchase the second house. Those cash for home companies give you about 50-60% of the current value. So, they might give you $100,000 for a house that you owe $240,000 for. Since the bank would have to release the lien to allow the sale, this won’t happen. As a matter of fact this is where your trouble lies. You owe $240,000 and in order to sell, you have to satisfy the mortgage. If you have cash, you can pony up the difference and still sell the house (looks like you’d need around $70,000 to do this). If you don’t have the cash to do that, you have to convince the lender to take a loss. You can’t sell the the house for less without bank permission to do so. The only way the lender will consider taking a loss is if they are looking at a larger loss by not doing something. A short sale is a loss for the lender. They are only going to do that if they think they aren’t going to get anything otherwise. If you are late on your loan (which will damage your chances of getting a new loan), then you might be able to convince them that this is their best option, but they’ll want proof you can’t pay (bank statements, income tax records, etc.). Your best long term solution would be to rent the house out and wait for the real estate market to come back and sell at a later date. Your other options will trash your credit and not let you be a homeowner for several years.