Author Topic: Negative Equity  (Read 5612 times)

help needed 68

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Negative Equity
« on: Jan 16, 2012, 05:22:41 PM »
Hi all,

I'm new to this forum so please don't be too hard on me !

I need to sell my property as I need to relocate for work but I've had in on the market for 2 months now and no takers thus far  :(

The problem is that I think that it's a little overpriced but I can't drop the price as the asking price is already less than I owe on it and I don't have the money to pay back to the bank.

Can anyone think of a way to help me as I can't wait for prices to rise

Thanks

Frances Long

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Re: Negative Equity
« Reply #1 on: Jan 16, 2012, 05:29:28 PM »
Dear Help needed,
 
Sorry to hear that you are having difficulty selling your property.

With negative equity it makes it much more difficult to sell. Have you considered renting the property out? 8)

help needed 68

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Re: Negative Equity
« Reply #2 on: Jan 16, 2012, 06:02:52 PM »
Hi Frances,

I really don't want the hassle, I'm moving a long way away and really just want it sold and the problems gone, make a clean break.

I've been doing some research and it doesn't look good for me for a few years if I want to sell the house.

Does anyone have any suggestions about what I can do ?

mikkilaw

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Re: Negative Equity
« Reply #3 on: Jan 16, 2012, 07:53:12 PM »
Hi Frances,

I really don't want the hassle, I'm moving a long way away and really just want it sold and the problems gone, make a clean break.
It needn't be that much hassle if you let through an agency. They will check the people out before they move in, and also take care of maintenance and stuff, and reduce your liabilities to some extent.

James Falla

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Re: Negative Equity
« Reply #4 on: Jan 17, 2012, 02:11:57 PM »
Hi Frances
 
Selling your house if it is in negative equity is a problem. If you get an offer from a buyer which will not cover the outstanding mortgage, the mortgage lender are quite within their rights to block the sale.
 
Renting the property might be a sensible alternative solution. However if you are reliant on the rent being paid to cover your mortgage payments you need to plan for the fact that the property might not be rented continuously. Even if you have a great tennant they may only stay 6 months to a year and then you might have a 2 month break while finding someone else. You have to be able to fund the mortgage during this period plus the water gas and electric bills.
 
If you do not want this hassle then you do have a second option although this is more radical. Given the property is in negative equity it is not worth anything to you financially. As such you could hand back the keys and allow the mortgage company to reposses. Then declare yourself bankrupt which would take care of the shortfall... Radical yes but you get the clean break you are looking for. Just an idea....
 
 
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Frances Long

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Re: Negative Equity
« Reply #5 on: Jan 19, 2012, 02:01:13 PM »
Dear Help needed,

Please don't consider handing the keys back to the lender this is one of the worst things you can do(in my opinion) as the lender will be forced to sell your house, most likely at a large loss and will keep coming back to you for the shortfall and add a bundle of additional charges as well as totally mess up your credit score for years to come!

I have helped several people with negative equity to walk away from their house without having to sell at a low price and without owing more money back to the lender. It is not the normal way of selling a property, but t does solve your problem. Let me know a few more details on your property such as
current market price
Outstanding mortgage
Mortgage interest rate
Where the property is
What it would rent out for

Once I have these I can make a few suggestions to you to fit your circumstances.




help needed 68

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Re: Negative Equity
« Reply #6 on: Jan 19, 2012, 05:01:23 PM »
James,

Thanks for your advice about handing back the keys but there is no way I want to do this, that can only lead to them selling the house for even less than I can and then saddling me with that debt to make my situation even worse.

That would only start me on the route to an even worse financial situation leading to bankruptcy or IVA - not something I want to even consider, I work in financial services so this would not go down well to say the least  ??? . In addition I want to buy another home before house prices rise and therefore I need to have access to finance in the next 5 years.

Frances,

That sounds interesting, I will send you a private message with the details you have asked for and see if you can help me - do you have a website I can look at to find out a bit more ?

Thanks

James Falla

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Re: Negative Equity
« Reply #7 on: Jan 19, 2012, 05:51:00 PM »
Hi help needed 68
 
As you rightly say, handing the keys back to the property leading to a voluntary repossession is only something to be considered as a last resort and would have to be considered hand in hand with a debt management solution such as an IVA or bankruptcy. As such generally to be avoided unless you are simply desperate to let the house go and move on.
 
Given the property is in negative equity I would be interested in hearing more about the option Frances has suggested. Frances can you expend at all? I come across people all the time who have a similar situation so would be kean to learn more.
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Frances Long

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Re: Negative Equity
« Reply #8 on: Jan 26, 2012, 05:33:29 PM »
 Hi Help needed 68,
Thanks for sending me the details by PM.
One of the ways I could help you would be to agree a purchase price with you that is fixed, and also put a long term rental contract into place, I would take over all maintenance issues and bills connected to the house such as council tax and utilities, which would give you the peace of mind that you need. In return I would want you to honour the purchase price that we have agreed upon until I can complete on the sale at the end of the rental agreement.

 

James Falla

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Re: Negative Equity
« Reply #9 on: Jan 27, 2012, 01:11:19 PM »
Hi Frances
 
This is interesting. Am I right in thinking that you agree to buy the property for a pre agreed sum (which will be sufficient to pay the ortgage in full) but this transaction does not take place until sometime in the future? In the mean time you help the owner rent out the property meaning that the mortgage payments and other utility bills are paid from the rental income?
 
I assume that the upside for you is that by the end of the rental period you hope that the market value of the property has increased and thus you have generated positive equity on the property. One question though, what happens if the tennant that you find does not pay the rent or the property stands empty for any period of time? Do you take the risk on this and honour the mortgage and utility bill payments anyway?
 
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Frances Long

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Re: Negative Equity
« Reply #10 on: Jan 27, 2012, 03:20:15 PM »
Hi James,

Yes that is one of the ways that we are successfully helping home sellers to sell their homes. Oh by the way, we don't help the seller rent the property out, we do all that for them. This takes away all the hassle for the seller and also allows us to put in the correct tenant who we know will pay the rent, council tax and utilities.

However, if for any reason the tenant didn't pay the rent we would ensure that the mortgage payments were met until a new tenant is found.

Is this something that would be useful to some of your clients? :-*

help needed 68

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Re: Negative Equity
« Reply #11 on: Jan 27, 2012, 03:31:40 PM »
Frances,

Thanks for your reply, I took a look at your website and it gave me confidence to deal with you and therefore I filled in your contact form so take a look and see if you can help me.

It makes a nice change to have a website with pictures of the owners as so many people nowadays hide behind a website with no phone number nor real information about the individuals

Hoping you can help me  :D

James Falla

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Re: Negative Equity
« Reply #12 on: Jan 27, 2012, 04:02:58 PM »
I would be interested to hear how you get on Help Needed 68
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Frances Long

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Re: Negative Equity
« Reply #13 on: Jan 27, 2012, 04:08:24 PM »
Hi Help needed,

I will be in touch with you on Monday. Thanks for filling in the form.

help needed 68

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Re: Negative Equity
« Reply #14 on: Jan 31, 2012, 10:51:17 AM »
Frances,

Thanks for the discussion, I just want to show the paperwork to my solicitor as it's different from what I am used to

Thanks