In February 2003, friends and I arrived at my new home with the first load of personal belongings to cross the threshold of my very first home. Located in a beautiful neighborhood, with neighbors I had spoken with during the purchase decision and liked greatly, in a small city close to the Metroplex, it was the perfect moment. “Moment” being the operative word because I unlocked the door and walked through the vestibule, put down the box, turned the heat on to find that the heat did not work. There was no heat and it was February. The Immediate realization was clear to me…there was no one to call, no one else would fix this, no one else would compensate me for the inconvenience of having to sleep elsewhere. I owned the entire responsibility.
There are many people that do not have a realistic grasp of the cost of homeownership. The changing property taxes, mandatory curb appeal maintenance costs codified by the city, standard insurance costs, private mortgage insurance costs, insurance costs after high weather events, monthly heating or cooling expenses, maintenance expenses of home systems and appliances. The list goes on and again, there is no one else to pick up the expenses other than the homeowner.
Bankrate reports 10 Million Homes in the U.S. are Upside-Down. In their blog of the same title they write of minimizing risk by refinancing. For the patient and diligent this is an absolute lane of refuge.
In an NPR article written in 2008 entitled Why Not Just Walk Away from a Home it was reported that “seven out of ten people foreclosing on their homes are healthy and gainfully employed, according to John Taylor, president of the National Community Reinvestment Coalition, they simply can’t afford to make their monthly payments”
There is middle ground between walking away, navigating refinance, or living under the delusion that something will break and the money needed will consistently become available in the future. If you truly know you did not embrace the proper expectations of what your home costs to maintain or if an unexpected expense places you in a position of no longer being able to afford your mandatory home improvements, you can get out from underneath it with a quick buy out. A home sells as is meaning no inspection costs, no real estate agent costs, title costs, mortgage lenders, lawyers, all these costs are removed. It involves simply finding a real estate investment firm that will buy your home and allow you to walk away immediately with fair market value.
Fair market value is a relative term. This is honestly a choice that is not for everyone, that said, for many others it is the choice. How can you make the decision without having called first? In Pennsylvania, there is an investment firm called Cash Closing Home Buyers / Main Line Properties. Because they are local they have the resources to send their local representatives to meet with homeowners at their property and monetarily assess the renovations that will be necessary to get the property back on the market. The property is not resold without improvement. Cash Closing hires local contractors to make the renovations before they put the property back on the market. In my opinion, this is a solid, responsible way to go.
If you are in a position where your property will continue to lose value because you cannot keep up with renovations I urge to you to self-educate regarding your options. The cash you receive on the sale can be re-used to buy a home that you can fully embrace monetarily now that you know what is involved or you can simply stop the stress and invest outside of the real estate market.
Make the call, know your options!