We just found out that we need about 20000 dollars in repairs to our house. We cannot afford to do this. We owe about 86000 on the mortgage and bought the house for 107000. What is the best solution for getting rid of this house? Should we sell for what we owe? Or is bankruptsy a more viable option? I just want out of this house. I would like to move away but want to do what we can to keep out of further debt.
Let me add that we don't have any other outstanding debt. Except student loans. But I don't really count those. No cc debt, though. And otherwise good spending habits. We live within our means but just cannot take out another loan for something we know we will lose money on. We have had the worst luck with this house. I'm starting to think it's cursed.
I am going to talk to a couple of realtor's. The house next door sold "as is" for the same reasons for about the same amount a couple of months ago. It isn't feasible to wait until the market rebounds. The problem is the foundation. It would cost us a lot to relocate while doing the repairs and really, I just can't see investing any more of our own money to fix something we won't be staying in for more than a couple of years.
If it is foundation, have you contacted your home warranty company (if it is new). Usually, there is a 10 or 20 year depending on your home, warranty on items like that.
GL!
Call a local real estate agent for a FREE market analysis. They can tell you what it's likely to sell for. Please, please, please get a Dave Ramsay book from the library (Financial Peace or Total Money Makeover). Bankruptcy is NEVER a good idea. You need to find out what it's worth before you can make a decision. Good luck!
I'd recommend having an appraiser come and take a look at the house and speaking with a Realtor for their opinion as well - especially with the market being as depressed as it has been the past few years. We refinanced our house last year, and the assessment came in $15K less than we had purchased (even with several thousands of dollars in upgrades over the 5 years we've been there).
If it really needs that many repairs, I'm sure you could list the house and negotiate the repairs on a contract if needed.
Bankruptcy should be a last option - always. It will haunt you for 7 years and make it nearly impossible for you to get anywhere financially. Most creditors will work with you to help prevent you from walking away from the debt.
You should at least try to sell the house, you may even be able to do a short sale and sell it "as is". I would talk to a few realtors as well and make sure they're not going to want an extra payment to do a short sale. Good luck!
Honestly I don't see how you would be able to sell a house that needs almost 20 % of its original value in repairs... by all means, talk to a realtor, but it just seems unrealistic. Is the house livable at all? What kind of repairs are needed? Where would you move? Do you have a job setup somewhere else?
If you declare bankruptcy or your house goes into foreclosure your credit score will take a MAJOR dive. You might not be able to get ANY decent credit for years (in case something unforseen happens), won't be able to finance a new house or car and your insurance rates might skyrocket. Employers also check credit scores, if you need to find a new job.
Intentional foreclosure you seems like a bad idea to me...maybe talk to a financial adviser.
Depending on the specific repairs (AC, water heater, etc.) will depend on how much of that $20K you should really spend. You actually have two options: 1. spend the money to get your house in sellable condition and find a realtor and list it now OR 2. look at your current finances and see what you can do to stay in it while you ride out the home crisis meltdown. The house prices will change and go up so it is a matter of your tolerance of staying in the home. I hope this helps.
Do the repairs have to happen right away? I would say plan to stay, do the repairs little by little and then sell when the market rebounds enough for you to come out even. Good luck!
