How long has your house been on the market? A month, two months or longer? The reality is that homes are sitting on the market for months right now and that’s something we have not seen in years. Inventory numbers are increasing and prices are even dropping a bit. The problem for sellers is that they want to cash in now on high values but there’s few options available.
Buyers are stuck with high interest rates which means if they pay $400,000 for your house, it’s not necessarily the asking price that’s tough on them but the monthly payments when you include interest, insurance and taxes. Can you afford $4,000 a month for your mortgage? Most people cannot and that’s why sales are down. If you are selling your property and are not seeing much luck, there is a way your current mortgage can help.
Transfer Your Mortgage To The Buyer
Before you get excited, yes, you can transfer some mortgages, but others cannot be transferred. You have to work with your lender to find out if you can, and if it makes sense. In situations where a mortgage transfer makes sense, the actual mortgage meaning money owed and interest rates are transferred to the person buying the house.
An example of how this would work is if someone wanted to buy your home for $400,000. You purchased the property 10 years ago for $200,000 and you still owe another $100,000 on it. The buyer can put money down on the property but the monthly payments will be too high for them. That’s when you, the lender and the buyer can reach a deal, the buyer takes over the mortgage and gets your interest rate for that amount that’s owed.
Not All Mortgages Work
Again, not all mortgages are going to allow for transfers. Additionally, not all deals make sense for this type of transaction. It’s difficult to know from a buyer’s perspective whether a property would have this option or not. It’s the sellers who have to advertise the opportunity and their willingness to work with you and transfer the loan.
Sellers can also help themselves by working with their realtor to discuss what options work best for the property and the deal they want. Transfers are a great option as is rent-to-own. Your difficulty to sell in this market has little to do with your asking price and more to do with the current interest rates. If you can create an opportunity for buyers to bypass these current rates, you not only can get a deal done, you can get near or at asking price.
Behind The Numbers
If you list your home for $500,000 and still owe $200,000 on it, you are expecting to get a payment of $300,000. For now let’s keep fees and costs out of the mix. That $300,000 needs to be your focus on this transaction, not the other numbers. If there’s a way for you to get the money you want and the buyer gets to pay less as well, why not explore those options, especially if your property has sat on the market for a month with no quality offers.
The reality is that almost every property will get offers. However, this is the time when sellers are seeing lower offers, some 20-40% lower than asking with no willingness to increase that offer. This is why, as a seller you want to know what your options are, what you can do and what you can improve on with not only the finances but the property as well. If you can put money and time into the property itself, you are lowering the move-in costs for a buyer and the work that needs to be done.
Why Realtors Like It For Sellers
It will not be easy to sell a property in this market unless you are in an ideal area and your home is in great condition or your asking price is very low for the value in that area. Buyers are looking every day for the next deal and they will review your property multiple times before saying no. What you want to do is show them not only a great property, but also a great way for them to save on it.
If they can save on your property and potentially pay $450,000 for the $500,000 asking price you wanted, that’s an advantage for them. How can they accomplish that? If you’ve made improvements to the property and can offer them a transfer option with a lower rate. The benefit to you? You’re still making what you wanted to with the sale.
