Can you sell your home for less than the Mortgage Balance and pay the difference??

[9877donna]

If someone wanted to sell their house for less than the mortgage that's on it right now can they pay the difference??
Is it complicated? Costly??

[Minnymouth]

You can - BUT WHY???? What purpose would it serve if you force yourself into out of pocket expense..........??

[chpxiii]

You can - BUT WHY???? What purpose would it serve if you force yourself into out of pocket expense..........??

Maybe to prevent a foreclosure?

[HHM]

Maybe to prevent a foreclosure?

But if the person has the cash sitting around to pay the deficiency difference, why would foreclosure be an issue?

In any event...

Is it costly, yes; complicated no.

Costly because you have to pay the difference plus realtor commission and closing costs; complicated no. The title company requests a buyout from the bank, once you have an offer that your willing to accept, you place the difference in escrow.

The other option is to approach the bank and see if they will accept a short-sale. Why pay the difference if the bank is simply willing to accept less. There are other threads that talk about short-sales.

In the grand scheme of things, unless you need to move for a job (i.e. more than 80 miles away), your better off financially to stay in the house.

[9877donna]

Just a low-ball offer...

No forclosure on the home.Just an offer $12,500 below asking and the mortgage balance.

[MTG_BANKER_OH]

If someone wanted to sell their house for less than the mortgage that's on it right now can they pay the difference??
Is it complicated? Costly??

Yes, they are also more then likely have to factor in the realtors comissions as well so you can figure about another 6-7% below what they owe they would have to come up with.

[9877donna]

Yes, they are also more then likely have to factor in the realtors comissions as well so you can figure about another 6-7% below what they owe they would have to come up with.

MTG Banker OH:
Do you mean they would need another $6000 to pay the Realtor?
I thought the buyer paid the Realtor commissions.Or is that their Realtors commission?
Thanks.

[MTG_BANKER_OH]

MTG Banker OH:
Do you mean they would need another $6000 to pay the Realtor?
I thought the buyer paid the Realtor commissions.Or is that their Realtors commission?
Thanks.

The seller pays the relator's comissions it is alread factored into the home price, unless this is a for sale by owner. Sellers also have closing costs over and above the realtors comissions when selling a home no matter what they pay for the buyer, many people are not aware of that.

[9877donna]

New York State has very high taxes and closing costs!!

The seller pays the relator's comissions it is alread factored into the home price, unless this is a for sale by owner. Sellers also have closing costs over and above the realtors comissions when selling a home no matter what they pay for the buyer, many people are not aware of that.

Thank You MTG Banker OH for explaining that to me.I do know we have closing costs as sellers.Upwards of $3000-6000 dollars!
New York State has extremely high taxes and closing costs.

[B12]

Did you hire a real estate agent to sell the house or are you not that far yet? If so, they will tell you up front what the commission is.

Sometimes a buyer will hire a real estate agent and pay the agent's commission. The seller doesn't necessarily always pay it. This is becoming more common with buyers becoming more savy and wanting full representation.

Keep in mind, before a contract is signed, (between you and the listing agent, or between you and the buyer), all is negotiable.

Even if a boilerplate contract is used, you may cross out whatever is printed and add what you would like before it is executed.

Stay in control and negotiate everything. All the other party can do is say no.

[HHM]

How it "usually" works is that the seller's rep takes a certain commission, but out of that commission, the buyer's rep is paid their commission.

Granted, everything is negotiable...but in the end, the commission is typically paid by the seller. So if the Seller's agents gets 5%...the buyers agent usually gets 2% of that.

[B12]

With all due respect HHM, a buyer or seller can hire an agent and pay the commission. There is no "typical" since law prohibits the setting of and paying of commissions.

This has become such a complicated matter in the past few years that most states have passed laws requiring disclosure of who works for whom in a real estate transaction.

Years ago there was only seller agency. When you got in a real estate agent's car, you assumed that agent was working for you and had your best interest in mind. Wrong! That agent that showed you houses worked for and was paid by the Seller and had a fiduciary responsiblity to that seller to get the highest and best price for the home you were buying.

No one told the buyer any differently. In the past years now, if the buyer's agent is paid by the seller, it must be disclosed in writing that the buyer's agent is paid by the seller and REPRESENTS the seller.

There is so much controversy around these disclosures that states have come up with dual agency, transaction agency and buyer agency.

When you sit down with your listing agent, depending on your state, he or she will explain all the forms of agency and ask you to choose one. At that point, you will decide who pays the commission and to whom.

Again there is no "typical" but the commission paid can be split evenly between buyer and seller agent, but in a bad market like this, a selling agency will offer the buyer's agent more of the commission or a bonus to entice the agent to sell it to his buyer.

The term "agent" refers to the real estate company in this sense, not the person who is the agent.

[9877donna]

B12 and HHM,
Thank you for the great info.It's good to know we can negotiate terms thru out this process.
It's so expensive when you buy or sell a house these days.And the taxes,closing costs and rates that NY State has these days makes it difficult for all involved.I think they offer 'no closing fees' for every state except NY.Bummer.
No wonder the market is so slow.a
All this information is great to know when buying or selling.
Thanks.

[chpxiii]

Again there is no "typical" but the commission paid can be split evenly between buyer and seller agent, but in a bad market like this, a selling agency will offer the buyer's agent more of the commission or a bonus to entice the agent to sell it to his buyer.

Now, that's messed up. Wouldn't that need to be disclosed to the buyer? That THEIR agent is, essentially, being BRIBED? That is exactly what this boils down to. You're also saying that people can quite simply be bought. (The buyer's agent in this case.) Sad, but true.

This is why I generally don't like sales people, period. Many are so easily bought. They're a necessary evil in this world, however, especially when you need to buy something like a house or car, or even smaller items.

I'm willing to walk away from someting if I don't like something in the deal. And so help me, if the buyer's agent is being enticed to sell me the house with a higher bonus, that person is so fired and I will go and find someone else.

[SinkingFast]

On our deal, when we sold our last house,............. The total commission we would pay was supposed to be 6% of the sale price. Flat fee.

I don't know what the split between agents and the Listing Office was supposed to be. Just that we would pay 6% of the sales price in RE Commission.

When the deal was actually put together,............. The buyers came up $1500 in their offer on the price. Our agent cut her commission to 1% and the Buyer's agent took $500 less that she was supposed to get to bring the deal together.

And, our agent got the Title company to perform their services for a flat fee of $100. Way less than they normally charge.

If the buyers are good, solid buyers, the Agents might be willing to work with you to put together a deal. After all, a smooth transaction that costs very little and makes them a little bit of money is better than no transaction at all.