This list can assist sellers in clearly understanding the pros and cons of each option.
1. Keep the property, make the payments and live in it. If you’re doing that now, great. Keep doing it if that’s your choice. No one is MAKING you sell now if you’re making your payments.
2. Keep the property, make the payments, and rent it out. If it’s been a rental, you can choose to keep it one. If it’s been your primary residence and you want to turn it into a rental, talk to a property manager and your tax adviso r/ CPA about what that will mean for your cash-flow and tax status for the property. (Capital gains, etc.)
3. Keep the property, make the payments, and just maintain it vacant, or use it part time as a 2nd home/vacation home. Again, talk to your tax advisor about what that means to you.
4. If you have Equity… Sell the property. Price it well and sell it now. You can do this in most markets. Homes ARE selling if they are priced correctly. Know that you are competing for buyers with Banks (REO/Foreclosures), Short Sales (combined Owner & Bank) and other Desperate Sellers with Equity. You MUST price it with that in mind to sell in this market. Period.
5. If you do not have Equity… Sell the property and bring money to closing to do so.
6. If you do not have Equity & do not have Cash… Sell via a Short Sale, if your Bank will approve it.
7. Do a deed-in-lieu of foreclosure if your Bank will approve it.
8. Allow the Bank to Foreclose on the Property.
9. Sell it Wholesale to a Flipper. (We buy ugly houses franchise, mega-investors, etc. – Low Price)
10. Auction the property using an Auction company (usually results in Lower Price than open market)
Note #1: Options 1-5 do NOT damage your credit. Options 6-8 do damage your credit to varying degrees. Be sure you understand before choosing an option.
Note #2: There is NO OPTION to price the home higher than it’s worth. It’s the same as option 1,2,3, or 8.
Note #3: Why would someone sell when prices are lower than you really want now? - Several reasons:
1. They have to. Divorce, Estate Sale, Job Transfer and option 2 or 3 is not a good one for them.
2. They simply WANT to, and have the financial ability to take the loss.
3. They want to buy another property and will MAKE UP THE LOSS ON THE PURCHASE