Do you need to sell a home requiring significant repairs but don’t have the time or money to complete all the required repairs? Do you need to sell it fast? If so, you have a number of options that depend on your current situation. The easiest and quickest option is to sell your home to an experienced real investor. Most investment transactions can take place in a short amount of time and with little to no work on your part. Another option is to work with your lender to see if they will do a short sale.
When to Sell Your Home “As Is”
Due to limitations on most conventional residential mortgage loans, the majority of home buyers can’t purchase a home as-is when significant repairs are needed. Loans backed by the VA and FHA, for example, require the home to meet certain standards prior to the purchase. In addition to lender restrictions, the typical home buyer does not want to purchase a home that requires major repairs.
If you want to sale a home that needs significant repairs, the best solution is to find a cash buyer to purchase the home as-is. Depending on the extent of the repairs that are needed, many cash offers will provide a fair market value based on the condition of the property.
The easiest way to locate an investor to purchase your home is to use an investment firm like RVA Home Buyers or contact a local real estate agent. Most real estate agents know investors who are looking for these types of investment deals.
When to Consider a Short Sale
If you currently owe more than your home is worth, a short sale might be a good option for you. A short sale occurs when the property is sold for less than the amount owed to the lender. Some mortgage lenders will accept short sales in lieu of foreclosure to mitigate the cost and time of a full foreclosure.
When a Short Sale Isn’t an Option
There are a number of reasons why you may not qualify for a ‘short sale’ of your property. The primary reasons include:
- Unable to Prove Financial Hardship – In order to qualify for a short sale, you have to be able to prove that you can no longer afford the mortgage. The lender will not agree to take less than you owe if he/she believes that you are capable of making the payments. In this case, you’re better off finding an investor to purchase the home as-is.
- You Filed For Bankruptcy – If you filed bankruptcy, you may not qualify for a short sale. A short sale is considered a collection activity, which is often prohibited when filing a bankruptcy. You have to be able to prove that you can no longer afford the mortgage. The lender will not agree to take less than you owe if he/she believes that you are capable of making the payments. In this case, you’re better off finding an investor to purchase the home as-is.
- You Have Property Liens – Most banks won’t allow a short sale when a property has a lien, such as a subordinate lien for a secondary lender.
Selling your home “Subject to”
In some cases it may be possible to sell your home “Subject to” the existing financing. In this case the buyer, who is typically an investor, can take over the financial responsibility for making your monthly payments. This solution doesn’t provide any profit or proceeds to the homeowner from the sale of the property, but it does remove the burden of the financial responsibility, and allows the investor the time needed to renovate and resell the property.
This is more common than many people think and can often be the only way to free yourself from a difficult situation.
There are no hard and fast rules when it comes to selling your home “Subject Too” but you can contact our company at (804) 420-8515 and we can help you understand if this option will work for you in your situation.
Be realistic in your expectations and be honest with yourself about what you are trying to accomplish. Chances are there is a solution available, it’s just a matter of what your goals and your specific situation.