January 25, 2005
Ever since moving to Overland Park in late June last year, we have been trying to sell our house outside of Springfield Illinois. Initially we were basing our asking price on the loan valuation the mortgage company / bank gave us in order to load us money against the equity in the house. We had a slight tax problem, and borrowing against the house was the only way out.
Unfortunately, the loan valuation of the house was high, we were good customers who had placed 20% down on our home when we bought it. The bank was eager to loan us more money so they fudged the valuation a bit to make the numbers work. Our first realtor warned us that the house was priced too high, but we were insistent on starting in the mid-190s; we wanted to see some money from the sale of the house after all. After six months of no real offers we were throughly disillusioned and fed up with the entire process. Having a mortgage and a second mortgage there, in addition to the rent and normal bills here, was bleeding us dry every month. We had lowered the asking price again and again until at best we were going to break even, and at worst we would have to borrow more money to cover the shortfall at closing time.
Our realtor was never overly communicative, and we often felt at odds with her, so in early January we switched to a different one on the recommendation of a friend. The new realtor did a market appraisal of the house and advised us to set the price just $10 under 180,000. She feels we'll get the asking price that way, but she doesn't think we can get more than 180 for it. Depending upon the real estate tax escrow we'll owe something like 12,000 at closing time if the house sells for 179,990.
I made a painful call to the mortgage company to ask what our options were; would they loan us the money, or should we start a "deed in lieu of foreclosure?" The mortgage agent I spoke with was very helpful, especially since she never once made me feel embarrassed or shamed by my situation. She agreed that the bank would work with us to write a new personal loan to cover the shortfall at closing time. She also said we couldn't do a deed in lieu of, since we had two outstanding loans, one with the bank's mortgage company and one with the bank proper.
In the end we feel like we have lost; lost the investment of the house, lost the potential equity it could have represented in a few years. But we also win; we win by getting the monkey of an empty house 400 miles away off our backs. We can rebuild our savings, and we can buy another house. We just have to let go of the current situation in order to allow that to happen. Yes, there is pain in the letting go, but ultimately it is less pain than we are suffering through by hanging on hoping for a miracle.