Crime Doesn't Pay in Real Estate

Or sometimes it does.

What can you do?  You’re job is relocating you to a different city and your wife is pregnant.  The condo that you live in is too small for you, your wife, and your two-year old and you need to sell it to move 100s of miles away for work.  You scrape together all your money since your wife isn’t working anymore, chip away at your savings and pay the mortgage every month.

But at what price? 

Do you sell it at market value and pay $70K out of pocket to sell your beautiful San Diego real estate which has gone down since you bought it?  What if you don’t have the 70K?

Do you list the home as a short sale knowing that it can hurt your credit?  And if it hurts your credit, how much will it hurt?

These are some considerations that some clients of mine had recently.

Next comes the question: to continue paying the mortgage or not?

Of course you know that no one can advise on that matter, however let me tell you what happened in this situation.

We listed their home, it actually all went very quickly, it was on the market in September with a counter from the bank in November and written approval by December 8th.  Pretty good!

After the counter, the approval to move forward and sell the house as a short sale came back with some additional “terms,” one of the terms was either a promissory note or a cash contribution from the sellers to sell.  The explanation that the negotiator gave was simply, “You didn’t stop paying your mortgage, so you can afford it.”

So there you go…in this day and age when people walk away from their house at the drop of a dime or stop paying the mortgage and continue living in it for a year (or more) and eventually sell it short – they get written approval from the bank with no cash contribution or promissory note.

But keeping paying that mortgage and they want money after you’ve been raked through the coals, lost your job, had a baby and need to relocate?!?  Is that the penalty?