The Potential Seller's Dilemma

April 18, 2011
There seems to be a dilemma facing current homeowners. Actually there are probably a number of dilemmas facing a homeowner who wants to move to another place. The dilemma involves the reality of the current real estate market - home prices are not what they were 4 years ago - or even 2 years ago. As a result, you have folks who may owe more than the current market value or folks who are not underwater but who have yet to accept that the equity in their property is less than they had planned. For the underwater home owner, the choices include: continuing to make payments on the loan that is greater than the value; stop making payments; putting the property on the market as a short sale; do a deed-in-lieu; or letting the property go to sale on the court house steps as a foreclosure. Other than the first choice of continuing to make the payments, the other choices will have a negative effect on the home owner's credit. The home owner would be able t0 purchase another home if the payments continue to be made, but there will be no equity, and in order to sell the property, the homeowner would be obliged to put money into the transaction. In these cases, the homeowner may realistically decide to rent the property if the desire to move is financially feasible. Another group of home owners who may want to sell in this real estate market because of personal issues or because they have found a home better suited to their current needs also are faced with a dilemma. (To Be Continued)