Needing Big Repairs
Amber can't afford to repair her home, and she is considering just walking away. Dave advises Amber to get with a good real estate agent to dump this house.
QUESTION: Amber in Oklahoma City can’t afford to repair her home, and she is considering just walking away. She needs $8,000 to make the needed repairs as it is sinking into the ground. She makes $31,000 a year and bought the house for $72,000. Dave advises Amber to get with a good real estate agent to dump this house.
ANSWER: You can get a real estate agent to look at it and try to sell it as is, provided you give full disclosure. You just have to say what the truth is, and the truth is it looks like it’s sinking. Then you present an estimate from a local basement contractor that says they can fix it for $8,000 or $10,000. Then based on that, they make you an offer.
You need to have a real estate agent look at it with you, but you can’t just walk away from it. You are going to get hammered if you just walk away. Not only will they foreclose on you and mess up your credit, they will also sue you for the difference. You are going to bankrupt yourself if you just throw up your hands and walk away because you’re disgusted.
It’s going to be difficult for you to scrape together $8,000 when you make $31,000. But if I were you, I’d get with a real estate agent and try to figure out a way to get this thing sold as- is and get yourself out of it. That may involve a short sale; it may involve the mortgage company negotiating on the balance of their mortgage. But that’s all better than a foreclosure.
If there is someone who can hand you $8,000, your best bet is to fix the house and then sell it. If you can figure out how to do that, it will be a gazillion times better than a short sale. Just about anything in this discussion is better than walking away.
What you learn from this is that you do more thorough discussions about a house before you buy it, because you apparently feel like there was something wrong with the house before you bought it that was missed. If it wasn’t sinking before but sunk after, that’s definitely not anybody’s fault. That’s just a freak of nature, in which case I’m not sure why insurance doesn’t cover it. Look into that a little more too.