How To Get The Most Out Of Selling A Home with No Equity
How to Sell Your Home With No Equity
Are you in a situation where you have no equity in your home? Or maybe you are even underwater on your mortgage, owing more than your house is worth?
Most people assume if they don’t have equity, they can’t sell their home. However, the amount of equity shouldn’t stop you from selling. There are several ways to sell your home even with little or no equity.
While some options are easier than others, there are ways to sell if you need to. Some methods we will discuss, like selling your house to a local investor, will even get you cash for your home without waiting for a lengthy underwriting process from a bank.
What is Home Equity?
Home equity is the difference between the principal balance on your home loan compared with what your house is worth. For instance, if you owe $230,000 on your mortgage and it is estimated to sell for $200,000 in the current market, you have negative equity or are underwater on your loan.
Short Sale
A short sale is one option for selling a home with no equity. However, it is a lengthy process and involves negotiating with your lender. In a short sale, you must be struggling to make your monthly payments and will need to receive approval from the bank to sell your home for less than you owe on your loan.
The drawbacks of a short sale include:
- It is a long process and time is not usually something you have if you are a distressed homeowner with little to no equity.
- Working with the bank for approval can be stressful and frustrating.
- The bank can still demand the deficiency amount after the short sale, which is the difference between what you owe and what the home sold for in the short sale.
- Forgiven debt might be counted as taxable income on your yearly taxes.
While a short sale can help if you are in a distressing financial situation, there are quicker options so you can move on to the next phase of your life and put the underwater mortgage behind you.
Traditional Sale With A Realtor
There is always the option to sell your home the traditional way, listing it for sale with a realtor. While you might be able to sell your home, you will still face challenges because you are underwater on your loan.
- It takes time. If you are having financial difficulties, time might be something you have a lot of.
- It is expensive. In a traditional sale you will have to pay commissions, holding costs, and for repairs and staging to get the property ready to sell.
- Even if you sell your home, if you have little or negative equity, you might be in a situation where you owe the lender money you don’t have.
A traditional sale might work if you have time and extra cash to help pay off the amount you owe to the mortgage lender.
Sell to A Local Investor
The best option in many cases is to sell your property to a local investor like Synergy Buys Houses Florida. A local investor can buy your home even when you have no equity, and there are several benefits.
- They will pay you cash for your home.
- You can close quickly, sometimes in as little as a week.
- A quality investor like Synergy Buys Houses Florida will deal with your lender for you.
- They will buy your home as-is. You don’t need to make any repairs, stage, or even clean your house.
If you are looking to sell your home quickly, this is an option you should explore. To start, find a trusted local investor like Synergy Buys Houses Florida in the Jacksonville area, and get a same-day quote for how much cash you can get for your home.
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