Is A Short Sale The Solution?

Is a short sale a solution to my problem?

I own a home with a 1st ($180,000), 2nd ($32,000) & 3rd Mortage ($30,000). The home is currently for sale for $253,000. We've had comps from 3 realtors and they run from high $240s to high $250s.

We're moving to Florida to find a cheaper place to live because we can't afford the monthly mortgage payments.

The house has been on the market since April. We lowered the asking price to $253,00 from $258,000 with no real offers. We can't afford to sell for much less considering $242,000 in mortgages, RE taxes, RE commissions and closing costs. We don't have the cash to make up the difference at closing.

The house is in very good shape (needs some updating) ans in a great neighborhood with steady housing appreciation.

I was hoping a short sale was the answer but a lawyer I contacted said (1) with three mortgagors it would be very hard, (2) I need a solid offer before approaching the mortgagors and (3)because the third mortgagor had the most to lose it would very likely persue me personally and I'd have to declare bankruptcy to avoid a $30,000 judgement.

I'm currently one month behind with the first mortgage and technically in default.

Is the lawyer correct? Is a short sale feasible? Can I do it on my own? Any suggesions would be welcome.

Comments(3)

  • mcl819028th October, 2003

    It looks as though your best options are to try and find an investor for a Lease option at what you owe, or possibly find a tenant buyer for a rent-to-own. They both will allow you to sell without any realtor fees. The rent-to-own will give you the added benefit of some money up front (option money), plus if the tenant buyer doesn't use his option, you can sell it in a few years and have the advantages of appreciation and principal reduction.[ Edited by mcl8190 on Date 11/05/2003 ]

  • TheShortSalePro28th October, 2003

    mortgagee = Lender
    mortgagor = Borrower

    You'll need to concentrate your efforts on the third mortgagee. Will they agree to a short sale? Probably. Why? because it's in their best financial interest to do so.

    Is protecting your future creditworthiness worth a couple of hundred dollars a month? The 3rd would rpobably agree to accept less to release their security interest, but would (may) hold you responsible for the deficiency... evidenced by an unsecured note payable over a period of time...

    That's the way to go. Unless, you could lease the property at an amount equal to or close to the amount of your mortgage payments plus taxes, etc.

  • mul742031st October, 2003

    Thank you both for your advice

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