How Much Do You Owe?

Why Would a Buyer Ask You How Much You Owe on Your House?

On a discussion list I saw a comment from one home seller who commented that he got a call from someone about his house who asked “personal questions, like how much I owe on the house.”  He wondered why a potential buyer would want to know this.

Hmmmmm, why WOULD a buyer want to know how much is still owed on the house?  Think about it a minute.  Have you been reading the papers the last two years?

Have you heard about the real estate slump, as some call it?  It is hard to sell a house, and buyers are smart and wary.  Many are doing extensive homework and learning smart ways to evaluate and offer on homes.  It is a buyer’s market.

Market prices and values have plummeted.  We have not yet seen the bottom.

Under Water?
Do you know anyone who now owes more in a mortgage than his house is even worth?  This is definitely something a buyer would want to know.  Offering on such a home would involve working with the bank for a short sale, or some other creative strategy to meet the needs of both buyer and seller.  Working a short sale is not an easy task.

There are many ways to make an offer on a house.  The balance owed is one factor necessary to know whether it is even worth making an offer on a house.  The balance owed on the house is a critical factor these days when some mortgages are much higher than the market value of the house.

Savvy Buyer
It sounds like this buyer is an informed buyer, maybe an investor with money for a quick sale.  The amount currently owed very much affects the value of a house offer.  They might work with the seller to get the bank to take less than still owed on the mortgage.

One Realtor explains that this factor can affect the speed of closing, also, a critical factor in some situations.  A buyer may also want to know for their own reasons if you as the seller can close quickly.

Quick Sale
The buyer will want to find an “equity positioned owner who is ‘willing and able’ to repay any existing liabilities on the home if applicable. The key advantage to a prospective purchaser is the response time with most offers being acknowledged and accepted on the the same day. The closing date is negotiable but it is customary for a home in this position to complete within 5 – 30 days” (blog article no longer online).

What if, after looking for weeks or months, you are suddenly offered a fantastic new job, but it is in another state, and you must report in 30 days or lose your opportunity!

Closing quickly will be your primary value, too.  You’ll want a quick-cash buyer who can quickly figure the deal and make you an offer.  The more the buyer understands about your situation the better you can come to a mutually beneficial deal.

Out of the Box
There are creative ways to make an offer even in such difficult financial circumstances, which a conventional lender will not be able to do.  And many buyers don’t want to wait 6 to 24 months to qualify for a conventional loan.  And you as a seller certainly don’t want to have your house sit on the MLS for 9-12 months.

But that is what is happening — unless some non-conventional approaches are taken.  This is where some private lenders and investors help very much.  They can match up sellers and buyers and structures deals in creative ways that enable everyone to win, not just the bank!  They help fill the gap and alleviate the crisis the conventional bank mortgage system created.

Most realtors are unaware of ways to sell quick and don’t like to let sellers know there are ways they can make more or save more money, like owner financing, in which YOU make the interest on the loan instead of the bank!

Particularly for sellers who have to sell quickly.  Real estate specialists can even work on your behalf with your bank if you get behind on payments, or even get a notice of default.  You can even stop a foreclosure, with the right strategy.

Personal Touch!
But do not decide on this over the phone.  Meet the person you will deal with.  If you have advertised your house, provide as much information as you can to those who call on your ad.  But if someone calls to make the first contact, if they want to follow up on your initial phone information, expect them to arrange a face-to-face meeting.

Even if you are pressed financially, facing foreclosure or must sell quickly. No one can talk to your bank until you sign a specific authorization naming the person or company who will work on your behalf.

Some buyers have private lenders who can close in a few days instead of weeks.  But they have to know the values in the deal.  Yes, how much is owed on the house can be important, at least for some buyers, to understand the value of a house.  Don’t be afraid to discuss this aspect of your house sale.  It is a buyer’s market.

Texas Homes Strategies  682-325-8439

This entry was posted on 21 June 2011 at 15:54 and is filed under Topics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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