Q&A: You Owe More Than Your Home Is Worth and You Need to Sell. What Are Your Options?

Short answer: you have more than one, and the first step is finding out whether the problem is as big as it feels.

Here is the plain version. Owing more than the home would sell for only matters on the day you sell. Until then it is a number on paper. The moment you need to move, it becomes a real question with a real set of answers.

Start by getting two numbers you can trust. The first is your payoff, which your loan servicer will give you in writing. It is usually not the same as the balance on your statement. The second is what the home would actually net after the costs of selling, which an agent can show you from closed sales near you. The gap between those two numbers is the whole problem. Many people never measure it and assume the worst.

If the gap is small, you may be able to bring cash to closing and move on. It stings, but it keeps your credit intact and ends the obligation cleanly.

If the gap is larger, talk to your servicer before you list. Lenders have programs for exactly this situation, and the terms change, so ask them what applies to your loan. A short sale, where the lender agrees to accept less than the payoff, is one path. It takes longer, the lender has a say in the price, and it can affect your credit and your taxes. Those two points belong with an attorney and a tax professional, not a blog post.

If you do not have to sell right away, renting the home out is sometimes the bridge. Run the real numbers: the payment with taxes and insurance, a vacancy allowance, repairs, and management if you will not be nearby. Confirm with your lender and your HOA that renting is allowed under your loan and the CC&Rs.

What trips people up is waiting. The gap does not shrink because you avoid looking at it, and the options narrow once payments are missed. The earlier you call the servicer, the more doors are open.

The thing most people get wrong is deciding alone. Get the payoff, get a real value, and sit down with a lender and an attorney before you choose. The feeling is bigger than the number more often than you would expect.

See what your home could sell for: https://www.previewarizonahomes.com/?utm_source=blog_pah&utm_medium=marketing&utm_campaign=daily

This is general information, not legal or tax advice.

Jon Hegreness, REALTOR / Associate Broker, Howe Realty
(623) 826-0888 / JonHegreness@gmail.com / License BR540940000
9059 W Lake Pleasant Pkwy, B-200, Peoria, AZ 85382
previewarizonahomes.com