Trying to Sell a Home with Little or No Equity


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Many homeowners are sweating finances these days. For a variety of reason they are in over the head or know they soon will be. Selling may represent the best option for finding relief.

Trying to Sell a Home with Little or No Equity

As early as 2001, real estate gurus were warning the housing bubble would burst with dire consequences. If you had listened to them and sold in 2001, you would have missed out on four years of tremendous appreciation on properties and probably be more than a bit bitter. Well, five years after the first predictions of a burst, there is little doubt it has finally happened.

Unfortunately, many homeowners failed to use their common sense and realize the market would eventually pull back at some point. They went out and bought grossly overpriced homes using interest only and hybrid loans that looked good for the first few years but are now a nightmare. Even if they went with more traditional financing, they often took out home equity credit lines or cashed out much of their equity with refinances. As a result, there are many people living in homes that have little or no equity. While this isn’t a disaster in and of itself, raising interest rates are creating higher monthly payments that are costing a lot of homeowners their sleep.

If you are in any of the above situations, you need to consider selling your home. Admittedly, it is a painful decision and one you probably will not like. That being said, it may represent your only way to avoid a disaster. Why? Well, home values are expected to continue to decline in 2007. Interest rates are harder to predict, but it would not be surprising to see them continue on their upward trend. In practical terms, this means things are going to get worse before they get better for homeowners that are currently in a tight financial spot. Selling now is a far better solution then eventually going into default on a mortgage that you can pay.

Once you decide to sell, you will be faced with the problem of swinging it without much equity. Traditionally, you would hire a real estate agent. With little equity, however, this is impossible given the fact a realtor is going to want a commission of tens of thousands of dollars. Your only solution is to sell the property on your own, which makes you a “FSBO” seller.

Fortunately, the support platform for FSBO sellers has grown massively over the years as the Internet has become a more important part of the real estate market. You can list your property on FSBO sites for a song. You can also get a home value analysis for less than $30, the same report used by real estate agents to set listing prices. You can even buy FSBO kits that contain all the legal forms you will need for your sales process. After that, you will simply need to do what you normally do in the sale of a home – clean it up, get the landscaping in shape and get the signs out.

By going FSBO in 2007, you can eliminate the cost of paying a realtor. In saving tens of thousands of dollars, you can move your home despite the fact it has little equity in it.

Raynor James is with - get a free one month listing when you sell FSBO homes for sale by owner.


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