Dunedin, FL -- (SBWIRE) -- 12/29/2014 -- Tampa bay homeowners can now sell a house quickly, even if the mortgage is bigger than the house-- and walk away with cash, under a plan announced yesterday by a Dunedin, Florida real estate brokerage firm.
"Well, really there are at least three variations of the plan," said George Beardsley, Broker-President of Advanced Realty Team, Dunedin, FL.
"And, then, you have to disclose all under water houses will not qualify, he said. "However, a lot of houses will fit the plan if the owners previously had no luck selling."
Can It Really Be Done
Beardsley gave as an example a home bought for $100,000 early in 2007 that would be worth $50,000 today and if it had been purchased with a 7 per cent mortgage in early 2007 the balance of the money still owed would be about $93,000 today.
"Many real estate professionals are going to tell you that you have to short sale the house or just walk away if you really have to sell today," he said.
(A short sale is a bank agreement allowing the sale at a price which will not pay off the mortgage. The bank takes a loss and may agree not to pursue legal action against the seller.)
Disaster or "Home Sweet Home"?
"The reason this plan can work in today's market is because one person's disaster is another person's "Home Sweet Home," he said.
"The seller has a nice home which only costs her about $665 a month before taxes and insurance which is probably less than the house would rent for today," Beardsley said.
"The interest rate on the mortgage is higher than rates advertised today and the house is worth less than the amount owed, which makes a traditional sale petty unlikely," he said.
"But for a potential home buyers with even a small dings on theie credit, whoare looking for a home of their own, this is a great opportunity," he said.
Affordability Is the Key
A home buyer who lost his home three years ago and has a foreclosure on his credit and who is making a good income that allows for $700 to $800 for housing cost may find this attractive," he said.
In five years the mortgage will be down to $85,000 and the value of the home could easily by $65,000 and in ten years the mortgage will be down to $73,000 and it hard to believe the house will not be worth more than that, he said.
"Of course no one knows what home prices will be, but for the renter/buyer it is about the same expense as renting with the opportunity to own over time, if they so choose," he said.
"And there are a lot of other issues to be considered and for a non professional to do something like this on their own, they should definitely secure the services of a board certified real estate attorney," Beardsley said.
"One of the big issues, and the reason why it works, is the buyer is taking over the obligation to pay the mortgage but the seller is still responsible for the payments," he said.
Great Deal, Or Big Risk?
This is called buying "subject to" the existing mortgage. It is a great deal for someone who cannot get a mortgage at today's rates but is making sufficient income to afford the home. And it is a risk for the seller who is depending on someone else to make his payments and maintain his credit, but in some occasions it will make sense.
Sometimes we buy and put a lease option renter in the house and sometimes we make the arrangements between a seller and a lease option buyer.
"Lots of ways this can be done. And we offer a free consultation for anyone looking to "sell" their over financed home in the current market," Beardsley said. "And of course any sale from owner to a new owner occupant must be Dodd-Frank compliant," he said
"We also a more aggressive program which allows the buyer to receive cash for the sale of his home that is over leveraged and has a mortgage that does not offer an attractive monthly payment, He said,
Details of the other plans will be announced soon, he said.
Media Contact :
Advanced Realty Team, Inc.
1950 Sharpe Lane
Dunedin, FL 34698
George Beardsley Broker-President